Tiraspol, 15 November. /Novosti Pridnestrovya/. The central bank planned to raise the official exchange rate of the US dollar. According to the head of the PRB, Vladislav Tidva, the rise occurred within a foreign exchange corridor of 15-15.50 roubles per dollar approved for 2017.
"What happened last week was a planned movement within the corridor established for this year," said Tidva on the First Pridnestrovian TV channel.
Referring to the reasons for the change in the official rate, Tidva noted that its rise is directly related to foreign trade imbalances, i.e. the prevalence of imports over exports.
"Besides, it should be noted that in the last quarter there was a decline in export earnings and an increase in imports. This is caused by the coming winter holidays and increased imports of food and non-food products. And this imbalance is being exacerbated. That's why it has been done now," said Tidva.
He expressed the view that most citizens associated changes in the exchange rate with rising prices. In fact, according to Tidva, it is not only the exchange rate that influences prices but also the money supply, housing and public utilities prices, and imported inflation.
"If we ask any person in the street, he will say that all prices have grown. In fact, it is not so. [There is] zero growth of prices, for example, for housing and public utilities. I want to note that housing and public utilities are the basic items in any family budget. Prices are not growing in this sector. This, among other things, allows us to contain inflation," underscored Tidva.
He drew attention the experience of other countries. For example, over the past three years and a half, Russia's devaluation rate has been 100%; in Ukraine it has risen to 200%, and in Moldova this rate has amounted to 50%. "Our devaluation rate has been 14% with inflation of 11.5% over the same period of three years and a half," said Tidva.
Another factor that influences devaluation and inflation, according to Tidva, is devaluation and inflation expectations. If people expect the exchange rate to change and inflation to rise, they put their expectations in prices.
"If we had a money overhang in June, which we had to remove, including in the cash market through intervention, there is no overhang now. And this is noted by all market participants. We see no serious growth in the demand for foreign exchange in the cash market," said Tidva.
