News Brief No. 95/17

News Brief: IMF Management Welcomes Economic Progress Made by Russia; Exchange Rate Action Designed to Support Program

July 6, 1995

Stanley Fischer, First Deputy Managing Director of the International Monetary Fund (IMF), said that the management of the IMF welcomes the progress made by the Russian authorities under their current economic program designed to reduce inflation and transform the structure of Russia's economy. In this regard, he said that IMF management views yesterday's exchange rate action in the context of the Russian government's determination to pursue the objectives of its economic program, which are supported by an IMF stand-by credit.

The Russian authorities, after consultation with the IMF, introduced an exchange rate band regime, under which movements of the ruble in relation to the US dollar will be limited to a specified range including the use of fiscal and monetary measures as needed, while ensuring the convertibility of the ruble under the existing liberal foreign exchange system.

"Provided that the economic program continues to be implemented, and that the exchange rate policy is backed up, if necessary, by supporting measures, Russia's prospects for achieving sustainable economic growth with low inflation are bright," Fischer said.