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Russia to take measures to stabilize currency market

Xinhua, December 17, 2014

• The Russian government has worked out measures to stabilize the currency market, Economy Minister Alexei Ulyukayev said Tuesday.

  "We think that the current exchange rate does not correspond to fundamental macroeconomic conditions...We have mapped out a set of measures, which should help stabilize the situation," Ulyukayev said after a government meeting chaired by Prime Minister Dmitry Medvedev on financial and economic situation.

  The situation is very complex but "we are neither the first nor the last one to pass through similar circumstances," Ulyukayev said, adding that "it is important to ensure the unity of actions taken by the Central Bank and the government."

  The Russian Central Bank would take measures aimed at increasing foreign currency liquidity supply on the domestic market in order to ensure "greater balance between demand and supply on the domestic foreign currency market", Ulyukayev said.

  According to Ulyukayev, the focus of refinance would be changed from ruble to foreign exchange by increasing foreign exchange offers and decreasing foreign exchange demand via free ruble assets.

  The meeting also discussed measures of regulatory supervision over banks and support for qualitative borrowers, Tass news agency quoted Ulyukayev as saying.

  "It is very important to support the banking sector and guarantee uninterrupted banking operation to ensure rapid settlements and provide lending to qualitative borrowers," he said.

  Ulyukayev added that necessary legislative amendments were also discussed with regard to the recapitalization, greater supervisory and regulatory control of Russian banks.

  Russian Ruble tumbled to an all-time low versus U.S. dollar on Tuesday, with the exchange rate once hitting 80 rubles per U.S. dollar and 100 rubles per euro in Moscow trade.

  Ruble has lost nearly 50 percent of its value against U.S. dollar and euro since March, despite several currency interventions of the Central Bank.

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