The Russian rouble could strengthen by as much as 18 to 20 per cent over the next three years, the Russian deputy economy minister Andrei Klepach said yesterday. Klepach warned that this appreciation would hurt manufacturers and limit economic growth. He added: “We are not ready to move to a floating rouble.” The rouble was allowed to depreciate by 35 per cent between August 2008 and January 2009 to protect the economy from recession.
CHINA IGNORES CURRENCY CRITICISM
China fought back yesterday against growing criticism in the US of its currency policy and said that the trade imbalance could not be resolved by the exchange rate alone. A spokesman for the Chinese commerce ministry also argued that politicising exchange-rate issues was counter-productive to global efforts in tackling the financial crisis. The US Treasury is scheduled to decide by 15 April if it thinks China is manipulating the yuan.
RBA: GRADUAL PACE OF TIGHTENING
The Reserve Bank of Australia (RBA) confirmed yesterday a more gradual approach to policy tightening. The March minutes signalled further interest rate hikes ahead but revealed that the objective would be achieved at a slower pace. This made another pause more likely in April before an interest rate rise in May. The market had previously been expecting the RBA to tighten next month.