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SINGAPORE, September 16 (RIA Novosti) - Russia's finance minister said Saturday that the increase of the ruble's average effective rate presented a more serious problem than the ruble's nominal rate.
President Vladimir Putin said in August that data on the economic situation in Russia shows that the strengthening of the ruble may be a critical factor for the economy.
Kudrin said in August that Russia's government will use economic measures to hold back the ruble's further rise, and intends to keep the national currency's appreciation within 4.7% of its average effective rate this year.
"It's clear that the average effective rate is formed from the change of the nominal rate and the change of the average effective rate as a result of inflation," Kudrin said, adding that even if the ruble's rate was fixed, domestic producers' expenditures would grow 5-6% with 10% inflation.
He said inflation was the main reason for the strengthening of the ruble.
The minister said the rate policy should take into account such factors as changing world prices for oil and capital inflow, but get rid of artificial reasons of currency strengthening.
"The rate policy should certainly react to these fundamental changes, but it should certainly remove the reasons that are artificial," Kudrin said. "This is inflation."
Kudrin attended a meeting of the G7 financial ministers in Singapore as part of annual conferences of the International Monetary Fund and World Bank. Kudrin is also scheduled to hold bilateral meetings with his counterparts.
