Prime Minister Medvedev: Russia will avoid extremely tough forex regulation

According to Prime Minister of Russia Dmitry Medvedev, the country will rely on market instruments to stabilize the foreign currency market.

“It makes no sense to introduce extremely tough regulation,” Medvedev said at the meeting with ministers, the central bank governor and the heads of exporters in Moscow.

“Our future actions should be based on market mechanisms.”

So far policy makers have not managed to restore confidence and stop Russians from converting their cash into foreign currency. The central bank has increased its benchmark rate by 750 basis points this month, while spending about $10 billion from its reserves. The decline of the national currency - more than 50 percent since June - has pushed strategists and investors to say that capital controls may be the only remaining option for Russia.

Russia has urged exporters to convert more of their revenue to help stem the ruble’s record weakening, with the Finance Ministry calling Dec. 4 for the boards of state-controlled companies to form currency-sales policies.

“It’s in our common interest to bring order to the foreign currency market as quickly as possible,” Medvedev said, according to the transcript on the government website, cited by Bloomberg.

According to Medvedev's words, the central bank and government worked out a package of measures to stabilize the situation with the ruble and will act in coordination.

Photo: TASS