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Government to hamper ruble appreciation in 2004
MOSCOW - The Russian government will not allow the ruble to appreciate considerably, Prime Minister Mikhail Kasyanov said at a news conference today. He pointed out that this year the Cabinet and the Russian Central Bank allowed the national currency to appreciate higher than planned, attributing a part of the reasons for the more-than-envisaged appreciation of the ruble to some foreign countries' policies that also led to the weakening of their currencies. Commenting on rumors about a possible drop in the ruble-dollar exchange rate to 15RUR/USD to 16 RUR/USD, Kasyanov said the government would not endorse such policies. If necessary, the government will help the Central Bank support the stability of the ruble so that possible exchange-rate fluctuations will not impair exporters’ standing, he added. Also, Kasyanov also said that individual savings shunted from the general monetary circulation in the economy in 2003 amounted to 10 percent of Russia's gross domestic product. “These resources were not in the banking sector and were not invested in the economy for meeting the demand for investments,” he added. At the same time, Kasyanov noted that the number of Russians living below the subsistence level has declined from 33 million in 2002 to 29 million in 2003. However, he pointed out that a lot still remains to be done to fight poverty in the country. "This will be a key issue for the government in the future," he said. As a part of the solution, Kasyanov said the Cabinet will have to ensure economic growth and reform the social security system, which will enable the government to increase pensions, improve medical services, other social security benefits and create new jobs.
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