WASHINGTON, April 10 (RIA Novosti/PRIME) – The short-term decline in the value of the ruble will spur the recovery of the Russian economy, but prolonged financial volatility will increase capital outflows, World Bank economist Hans Timmer said Thursday.
“Anticipating that the volatility that they are facing now will be short-lived, then that’s not a bad strategy,” the chief economist of the World Bank for Europe and Central Asia told reporters on the sidelines of the spring session of the IMF and World Bank.
He added that he saw no threat in the weaker ruble as long as the trend is short-term.
“If this is a much longer term development, and you will see capital outflows that will grow and that will continue for a long time, then the Central Bank will have to change its policy,” he added.
Timmer linked the ruble exchange rate volatility with recent fluctuations in the financial markets caused by a tense geopolitical situation among other factors.
“That is one of the big impacts that any country faces and there are some tensions because they are reflected in international financial markets,” he added.
“Russia at the moment has significant reserves so that’s good, they can draw from that, but in the environment that you have also opportunity to let the currency depreciate – that is also helpful for Russia,” he concluded, while expressing hope that the situation with the current instability of the ruble ends well.