«Taking into account high import dependence of the republic, devaluation of the Pridnestrovie's ruble will cause price increase immediately. We may not devaluate the ruble. This will hit the population's wallets at once," the deputy Economic Development Minister Dmitry Boltrushko told in the interview to our journalists.
According to the deputy minister, the Pridnestrovian Republican Bank's (PRB) policy on preservation of the fixed ruble exchange rate is the most favorable option for the republic with the socially oriented budget in this context. Dmitry Boltrushko is sure that the way of national currency devaluation will only aggravate a difficult situation in the Pridnestrovie's economy. However, he noted that ruble weakening would improve exporters' capacities; however the cumulative economic effect will be negative due to the weakness of the republic's domestic market.
«Smooth as well as sharp devaluation will cause panic. People will rush to exchange Pridnestrovie's rubles into another currency in the banks. As a result, we will get a galloping effect. The PRB won't be able to cope with it due to the current gold and foreign currency reserves. In such case, the population may be reduced to indigence in a short period," Dmitry Boltrushko told journalists.
It will negatively impact the crediting system, the deputy minister considers. «In case of the intensive devaluation, people who take out foreign currency loans won't be able to pay the bills. It will cause the revenue shortfalls in banks, and in return it will start a chain reaction increasing the risks and the credit interest rates," he emphasizes.
Concerning the capacities of the PRB to keep stable ruble exchange rate, Dmitry Boltrushko has no doubts. Despite the fact that Pridnestrovie's currency reserves shortened by 10% from 31.73 down to 28.44 million USD to the May level in June of the current year the PRB is going to protect ruble from inflation. At the same time, Pridnestrovie's ruble situation is also aggravated by the negative external balance. The negative balance reached 288.3 million USD in January-May, 2015.
«Heavy pressue is put upon the ruble. Nevertheless, the PRB has all mechanisms required to sustain national currency rate for either mid-term or long term period," Dmitry Boltrushko told.
