Archive for the ‘currency depreciation’ Category

Despite Economy, Russian Leader Pledges to Continue Social Programs

December 24, 2008

Russia‘s financial crisis may slow development but won’t derail state social programs, President Dmitry Medvedev said Wednesday amid new warnings that the government next year would face its first budget deficit in a decade.

Medvedev said hard currency accumulated during an eight-year economic boom driven by high oil revenues would help soften the impact of the crisis, but unemployment may rise from the current 6 percent.

By VLADIMIR ISACHENKOV, Associated Press Writer

“We naturally may lose the tempo of growth,” Medvedev said in televised remarks broadcast by all Russian television stations. “Crisis is crisis. But we must not lose any of our social achievements. I mean wages, real incomes and pensions.”

Medvedev said the nation was in a difficult economic situation, but assured it was not in danger of defaulting and was not planning to denominate the currency. The ruble’s rate, however, would become “a bit more flexible” to reflect the economic situation, he said.

The ruble fell Wednesday to its lowest level ever against the euro as the Central Bank again eased its support for the currency. In late afternoon, the ruble was trading at 40.2 against the euro and 28.7 to the dollar.

It was the second currency depreciation this week, and the 10th since Nov. 11 when the Central Bank began backing off its support. The ruble has fallen about 11 percent in the past six weeks.

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