Russia sees weaker rouble than previously expected in 2019

MOSCOW: Russia's economy ministry has revised its forecast for the rouble's average exchange rate this year to 66.4 per U.S. dollar from 63.9, minister Maxim Oreshkin told lawmakers on Wednesday.

Oreshkin said the revision was due to changed assumptions for the euro-dollar exchange rate, as well as geopolitical factors, such as U.S. sanctions against Russia over its alleged interference in a number of foreign countries.

"It's clear that the sanctions, which increased relatively over the last year, do not allow us to hope for a sharp strengthening of the rouble from previous levels," Oreshkin said in the State Duma.

Oreshkin said he saw no reason to change the ministry's inflation forecast of 4.3 percent, adding the rate should fall below 4 percent in January 2020.

"Speaking of 2019, I'm sure that the acceleration in inflation and the slowdown in economic growth will be temporary," he said.

The ministry also kept its forecast for GDP growth in 2019 at 1.3 percent, Oreshkin said.

Russia's economic growth slowed in the last two months of 2018 from the 2.5 percent seen in October, when the country saw  higher agriculture and industrial output.

The ministry said in January it expected economic growth to reach 2 percent in 2018, after previously forecasting growth of  1.8 percent for that year.

The ministry cut its 2019 forecast for the price of Urals oil to $62.8 per barrel from $63.4.