Ruble undervalued

Russian Prime Minister Dmitry Medvedev said that Russia is heading towards a 9-percentage annual inflation. However, he added that the problem of the Russian currency is that the ruble is undervalued, and risen prices for multiple goods are caused by external factors not by the ruble's real cost. Taking new factors into consideration, Medvedev said that 2015 budget may be revised. "If economic conditions change significantly, we will have to review the scenario and ultimately make budgetary decisions. But we are not doing this yet," he noted. To the question over negative factors influencing the Russian economy the premier stated that everything has an impact on it. “First of all, the price of oil. I just explained how the oil price has been changing. There is a correlation here, although it is not a direct dependency. When oil fell to a half of what it cost, this certainly weakened the ruble. The second factor that has naturally influenced the ruble rate is the outside pressure that Russia is currently experiencing. Whatever they say, sanctions always create certain expectations, in one way or another, as financiers put it. These expectations, in turn, have impact on public sentiment,” Dmitry Medvedev answered. What is more, he believes that long-term weakening of the ruble is of no use for the Russian economy. “Furthermore, most economists and analysts agree that the ruble has become too weak and undervalued.”