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    Russia to gradually move to free floating ruble rate

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    Russia's government will gradually move to a floating ruble exchange rate, Prime Minister Vladimir Putin said on Tuesday.

    Russia's government will gradually move to a floating ruble exchange rate, Prime Minister Vladimir Putin said on Tuesday.

    "We will not do anything to shake up the market," Putin told reporters in Vladivostok, Russia's Far East. "We will very cautiously shift to a floating rate."

    Putin said the economy is not diversified and is not prepared for a free ruble float at the moment.

    Russia was severely affected by the international crisis that started in September 2008, mainly due to its dependence on the price of oil, its major export commodity.

    The government has spent 900 billion rubles ($30 billion) on what it called anti-crisis measures in the first 10 months of 2009, Finance Minister Alexei Kudrin said earlier this month.

    The Central Bank has also made interventions to cut the excessive exchange rate volatility, buying or selling foreign currency. The bank also said in mid-December it is continuing to gradually move toward a free float and has no target for the ruble exchange rate against a euro-dollar basket.

    The currency stabilized in spring and rallied briefly in the fall along with oil prices, which fueled the economy's recovery from recession.

    Putin also said Russia will adjust regulations to limit the inflow of speculative money into the country and encourage long-term investment.

    "We need to adjust rules to make Russia less attractive for speculative capital," the premier said.

    The Central Bank has cut its refinancing rate several times since April, bringing it to a record low of 8.75%.

    VLADIVOSTOK, December 29 (RIA Novosti)

     

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