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20 Dec, 2006 05:42

Rouble appreciation can't be tolerated for more than 1 year: Finance Minister Kudrin

Rouble appreciation can't be tolerated for more than 1 year: Finance Minister Kudrin

Russian Finance Minister Alexei Kudrin has declared that the rouble appreciation is Russia's main economic policy failure of 2006 and it cannot be tolerated much longer.

Speaking in an interview to Vremya Novostiey, Kudrin declared that the rates of appreciation seen by the rouble in 2006 could be tolerated for one year but not for two or three. He added that if it were to strengthen by 50% in five years then it would be a serious blow for the economy.

The comments come after the rouble has risen by more than 8% against a basket of currencies of Russia's main trading partners, and more than 9% against the U.S. dollar.

The finance minister has been a constant critic of the central bank's policy of using rouble appreciation to fight inflation. This policy proved partly successful, with Russia likely to record inflation this year of 9%. But the minister noted that its hurting Russian producers who compete against imports, particularly in the agricultural sector.