WORLD-Putin trying to ease fears
MOSCOW –– President Vladimir Putin has sought to ease fears over Russia’s economy, insisting that the dramatic fall in the rouble will stabilize.
Speaking at his end-of-year news conference, which lasted over three hours, he blamed “outside factors” for the currency hitting an all-time low.
But he admitted Russia’s central bank could have acted more swiftly.
Russia is on the verge of a recession due to falling oil prices and sanctions over its role in the Ukraine crisis.
However, the president denied pursuing an “aggressive” foreign policy and accused the United States and European Union of conspiring to weaken Russia.
Putin accepted Russia had failed to diversify its economy for the past two decades and relied too heavily on its oil and gas exports.
But he insisted the nation’s currency reserves were sufficient to keep the economy stable, saying the central bank should not “burn” its $419 billion reserves.
“I don’t believe you can call it a crisis –– you can call it what you like,” he told a packed conference hall.
If the economic problems persisted, he said, the government would have to “reduce social spending and future growth”.
But he added: “Our economy will get out of this crisis. How long? Maybe two years, but after that, growth is inevitable.”
Although the rouble strengthened this morning, it has taken a battering in recent days.
The currency’s collapse came after a drastic 6.5 percentage point rise in Russian interest rates to 17 per cent.
Earlier this week, there were reports of Russians flocking to the shops to spend their cash before prices shoot back up. Many were said to be buying cars and home appliances.
Putin estimated that Western sanctions, put in place after Russia annexed Crimea from Ukraine in March, had accounted for roughly 25 to 30 per cent of the rouble’s troubles.
On Ukraine, President Putin said he was hopeful the conflict could be solved through peace talks.
He urged the Ukrainian government and pro-Russian rebels in the east of the country to conduct a quick “all for all” prisoner swap before Christmas.
Ukraine and the West accuse Putin of sending Russian troops to fight with the rebels, but the Kremlin denies the allegations.