The ruble will devalue sharply as Russia’s current account turns negative in about two years due to import growth, Deputy Economic Development Minister Andrei Klepach predicted on Thursday.
“Given the huge gap between imports and local production, given more long-term risks, not what is happening now, but in two years … we will get a negative current account anyway,” he said, adding that the ruble rate is overvalued at least 10 percent.
“The central bank believes it will be doing it smoothly, under control … I have never seen smooth devaluations.”
He said the ministry expected capital outflow to amount to $35-40 billion this year. The central bank’s forecast is $30-35 billion.
Russia will hold parliamentary elections this December and presidential polls in March. Capital began flowing out of the country late last year due to the political uncertainty.