The government and the Bank of Russia should prioritize economic growth, for which the optimal ruble exchange rate is important, First Deputy Prime Minister Andrei Belousov said in an interview with Interfax. According to him, the consensus opinion estimates the optimal ruble exchange rate for the economy at 70-80 rubles and it is necessary to return to this figure as soon as possible.

Belousov admitted that there are limitations for this on the part of inflation and channels for building up domestic demand.

“I do not want to give quantitative estimates and forecasts so as not to generate speculative expectations in the market. Nevertheless, I can say that both the government and the Bank of Russia are working on this task, and I hope that we will be able to solve it,” the first deputy prime minister emphasized.

Belousov said that a new approach to monetary policy, including such a radical step as the transition to targeting the ruble, rather than inflation, is being discussed in government agencies and at the expert level. According to him, the mechanism in place since 2015 allowed balancing the ruble exchange rate within certain ranges with the help of the budget rule. This expanded the Central Bank’s ability to manage the mission and, accordingly, inflation targeting. But now this mechanism has “practically evaporated” due to the blocking of the Bank of Russia’s reserves and with the automatic suspension of the budget rule.

Under these conditions, the first deputy prime minister emphasized, economic growth should become an imperative to address the issues of poverty, demography, quality healthcare, education, roads, ecology, housing, and growth of incomes of citizens.

“If we take the current agenda, it is first of all to increase domestic demand. If everyone agrees with this goal, with this task, then we have space for joint development of a new mechanism, in which there will be a place for the equilibrium rate,” Belousov said.