FX.co ★ Russian policymakers learn how to undertake verbal intervention

Russian policymakers will learn how to undertake verbal intervention aimed to influence the ruble forex rate. Reportedly, the Bank of Russia has already prepared guidelines describing how to do it.

It is good news for the government officials, as their vast experience in making election promises will be enriched with skills in bringing home a message. Now they will get clear instructions on the techniques of verbal interventions. The Russian central bank is going to draw up specific recommendations for policymakers of all ranks in the hope that this will help to avoid negative and unfavorable effect which verbal interventions can exercise upon exchange quotes. The Bank of Russia had to take such measures owing to inappropriate comments made by some politicians. Particularly, remarks about excessive ruble appreciation were out of place. It is noteworthy that while oil prices are low, the strong ruble is not beneficial to the Russian government. Thus, the guidelines are aimed to prevent such policymakers’ mistakes.

It is a general practice for developed countries when experts including policymakers deliver statements intended for changing a currency exchange rate. Hopefully, this practice will prove to be effective in Russia.