Russia can withstand & take advantage of economic hardships – finance minister
“Many expected that sanctions and the reduction of oil price would cause the Russian economy [to] collapse, ruble depreciation, social unrest, hyperinflation. But it did not happen,” Siluanov told RT in an exclusive interview.
“There is no winners or losers” in this game, Siluanov stressed, emphasizing that Russia has “no illusions” that “tomorrow” sanctions could be canceled.
The finance minister was commenting on the multibillion dollar anti-crisis plan that Russia rolled out in January. It included over 60 measures aimed at reversing Russia’s slide into economic recession, exacerbated by the national currency crisis.
Siluanov attributed the success of Russia’s monetary and fiscal policies to “competent financial decisions” implemented by the government following the approval of the Russian president.
Pushing through and convincing lawmakers of the various measures required to stabilize the economy was a “difficult process, ” Siluanov admitted. Tough policies were required in order to “reduce inflation” and make Russian people believe in a strong national currency.
After losing about 50 percent of its value in 2014, the Russian ruble has recovered about 30 percent of its value in the first 3 months of 2015.The ruble rally was spurred on by the Central Bank lowering interest rates, which brought investors scared by the crisis back to the Russian market.
The Central Bank spent more than $90 billion from the currency reserves defending the ruble in 2014 before a decision to move the currency to a free float regime in November. So far it has been spending significantly less in 2015 and the ruble has still stabilized.
Without proper adjustments to the Russian monetary policy, Western sanctions could have potentially worked, ruining the Russian economy, Siluanov believes.
“If we did not act, this [the recovery] would not have happened. And then our opponents would probably have it their way,” the minister told RT. The soundness of the chosen course made the Russian economy survive despite “restrictions in the flow of capital, trade restrictions, and despite the decline in oil prices,” Siluanov stated.
“We know how to react to this situation,” Siluanov said, pointing out that Russia has learned to easily survive with oil fluctuating around the $50/barrel mark.
“We must seize this moment for the benefit of Russia, make the right decisions in complex conditions, and so we see we can handle any hardships,” Siluanov concluded.