Alexei Ulyukayev noted that the gap in discount rates on the Russian and foreign markets could shrink to a mere 2 or 3 percentage points in the next two or three years. As he pointed out, this will render speculative operations on the Russian currency market unprofitable.

“When the difference drops to just two or three percentage points, speculative players will be far less motivated,” he observed. Meanwhile, this factor will have no impact on investment flow, in Ulyukayev’s estimation. “I am certain that any investor making an investment decision is concerned about how well his resources are protected and how strong the guarantees of capital repatriation are, not about exchange rate fluctuations,” he concluded.

Meanwhile, the Central Bank’s head, Sergei Ignatyev, stated that the refinancing rate could sink to below 9 percent, though he refused to set any deadlines. Still, he noted that the Bank of Russia usually made no more than one discount rate action a month.

Referring to the pace of reducing the rate the Bank of Russia had so far opted for, Ignatyev observed that there was no need to make the cuts more drastic. “So far, our actions have proved to be right, and caution is never redundant,” the banker stated.

As Ignatyev explained, the cuts in the discount rate have been triggered by slowing inflation. The Bank of Russia will only hike the rate up again if there are clear signs of the economy overheating.

As reported earlier, the Bank of Russia has cut the rate eight times over the year, from 13 percent to 9.5 percent, with the latest move dating back to October 20.