The Russian rouble weakened beyond 100 to the US dollar on Monday, touching its lowest point in almost 17 months. This came as President Vladimir Putin's economic advisor Maxim Oreshkin said Russia wants a strong currency and monetary policy was undermining the rouble.
In an article, Oreshkin stated the current exchange rate had deviated from fundamentals and normalization was expected soon. A weak rouble complicates economic transformation and impacts living standards, he added.
The rouble has seesawed since Russia's invasion of Ukraine, plummeting to a record low before recovering on capital controls and export revenues. Before the war, it traded around 75 to the dollar.
Russia's current account surplus has dropped sharply this year, cited by the central bank for the rouble's depreciation. However, Oreshkin pinned blame on the central bank, signaling discord over monetary policy.
He said soft policy was the main driver of rouble weakness and inflation. The central bank has tools to stabilize the situation quickly by reducing lending rates to sustainable levels, according to Oreshkin.
After hiking rates 100 bps in July to 8.5%, the bank has signaled more increases are required ahead of its next decision in September. The comments reflect official interest in a strong currency despite economic fallout from sanctions.
