The depreciation of the dollar against the EURO and Japanese yen in the near future, i.e. by the end of this year, will not affect Russia’s economy and the rouble/dollar rate. Such an opinion was expressed by Mikhail Zadornov, Deputy Head of the Budget Committee of the Duma and member of the Yabloko faction, in an interview with journalists on Thursday, August 16, 2001.

According to Zadornov, over the past month dollar depreciated by 10% against EURO. Zadornov also thinks that this trend may continue, and that in the next six months the dollar may depreciate by another 10% against EURO.

Zadornov said that this had occurred owing to the slowdown in growth rates of the US economy and the emergence of a number of other negative trends.

At the same time he also stressed that a number of leading European economies, such as Germany, for example, have also encountered difficulties.

However, Zadornov thinks that in the medium term (over the next one or three years) the trend towards a depreciation in the dollar/EURO rate would affect Russia’s economy, but added that this process would yield both negative and positive developments.

The negative developments may involve a reduction in the present surplus of exports over imports, i.e. a reduction in the positive foreign trade balance, as exports are estimated in dollars andš imports come mainly from Europe and will be estimated in EURO. According to Zadornov, these factors will adversely affect the balance of payments in Russia, as imports will become more expensive in the medium term.

At the same time, this trend has a number of positive aspects for domestic producers, as they will find it easier to compete with their foreign counterparts in the production of specific groups of goods.

Zadornov also thinks that Russian citizens should not panic over information on the decline in the dollar/EURO rate, as this will not affect their households in the short term.

However, Zadornov advises Russian citizens with dollar accounts in foreign banks to keep part of their funds in dollars and convert the rest into EURO.

Based on Interfax reports.