Sanctions have led to a strong ruble which is harmful to domestic production, Herman Gref explains
© Getty Images / Andrey Rudakov / Bloomberg
Exporting hurts the Russian economy in the current environment, as it leads to excessive strengthening of the ruble and destroys domestic production, Sberbank CEO Herman Gref said on Friday at the St Petersburg Economic Forum.
Faced with unprecedented economic sanctions, Gref believes imports could in fact help strengthen the Russian economy.
“What was considered the main and most important thing, export, is now becoming poison for the economy. Import… becomes the main medicine to cure the disease of the strengthening ruble which is, in fact, also destroying domestic production,” he noted.
The only foreign currency that is valuable for Russia is the Chinese yuan, Gref added, explaining that other currencies like the Turkish lira and the Indian rupee “will be of no value” because Russia will not be able to trade them as they are not “freely convertible” currencies.
According to Russia’s top banker, the new economic reality is impossible to grasp in the short term, and rebuilding logistics, infrastructure, and payment chains is even harder. “Everything has turned upside down,” he said.
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