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00:00QUESTIONS ON RUSSIA AND THE ECONOMY AND ON YOUR CURRENCY EXCHANGE. LET'S START WITH THE PRICE OF OIL BECAUSE WE JUST HEARD FROM THE OPEC SECRETARY-GENERAL, HOW IMPORTANT IS IT FOR YOU THAT LEVELS REMAIN AT THIS LEVEL AND DO NOT COLLAPSE BECAUSE OF SHALE PRODUCERS, WHAT CAN YOU DO TO MAKE SURE THIS IS THE CASE? >> IF YOU LOOK AT THE RUSSIAN OIL FIELDS, THE COSTS ARE MUCH LOWER, THE RUSKIN -- RUSSIAN FISCAL SITUATION -- HIGH OIL PRICES HELPED BUT DOES NOT MATTER THAT MUCH FOR OTHER OIL EXPORTERS. FRANCINE: BECAUSE THE PRICE OF OIL HAS GONE UP AND THE BUDGET WAS BASED ON THE COST OF $40 PER BARREL, YOU HAVE EXTRA MONEY, WHAT DO YOU PLAN TO DO WITH THE MONEY? >> THE DECISION MADE BY THE PRESIDENT YESTERDAY NOT TO SPEND ADDITIONAL MONEY COMING FROM THE OIL SECTOR, THE GOVERNMENT WILL SAVE IT. DECREASING THE DEFICIT. TOM: THERE IS SENSITIVITY'S HERE , TELL US ABOUT THE QUALITY OF THE FOREIGN EXCHANGE RESERVES OF YOUR NATION, AND GENERAL THERE HAS BEEN A DEPLETION, $100 OIL DOWN AND DOWN, WHAT IS THE CHARACTER OF YOUR RESERVES AND WHERE DO YOU WANT THEM ONE YEAR FROM NOW? >> RUSSIA STOP USING THAT IN LATE 2014. THE BALANCE OF PAYMENTS IN 2015 ADJUSTED TO A LOW OIL PRICE ENVIRONMENT AND LAST YEAR WHEN THE OIL PRICE WAS UP $40 WE CUT. TOM: THERE WAS A STIR THE OTHER DAY AS PRESIDENT-ELECT TRUMP SPOKE OF A WEAKER DOLLAR IN AMERICA, WHATEVER THE CONDITIONS, WE NEED A STRONG DOLLAR POLICY, YOU KNOW ABOUT THIS FROM YOUR WORK. IS THERE A POLICY IN RUSSIA OF A STRONG RUBLE POLICY? >> NOT OF STRONG OR WEAK, MARKET-DRIVEN, . WE NEED TO HAVE LOW IMPACT OF THE VOLATILITY OF OIL PRICES ON THE LONG-TERM EXCHANGE RATE WHICH IS IMPORTANT. FRANCINE: IF YOU LOOK AT THE RUBLE WHICH FELL IN 2014, SELLING -- FALLING IN 2015 AND INCREASED RUSSIA'S COMPETITIVENESS AND WE HEARD FROM YOUR COLLEAGUES IN THE CABINET SAYING THE RUBLE IS GOING UP WILL HURT THAT COMPETITIVENESS, DO YOU AGREE? >> THE MAIN THING THAT IMPACTS COMPETITIVENESS IS THE INVESTMENT ACTIVITIES IS PREDICTABILITY IN THE ENVIRONMENT WHICH THE COMPANY'S OPERATING. IF OIL INCREASES OR GOES DOWN, VOLATILITY MARGINS -- FRANCINE: THAT MUST BE HIGH YOU DEAL WITH CURRENCY -- HOW YOU DEAL WITH CURRENCY -- WHY DO YOU NOT AGREE? DO YOU AGREE WITH YOUR CABINET? YOU SAY THE RUBLE HAS AN EFFECT BUT LESS OF AN IMPACT THAN THE PREDICTIVE ABILITY OF THE OIL PRICE. >> WE NEED TO HAVE A STABLE ENVIRONMENT WHICH IS WHY THE GOVERNMENT IS NOT RUSHING TO USE THE EXTRA OIL REVENUE. USING THIS SAVINGS ON THE GOVERNMENT, WE CAN HAVE SOME KIND OF STABILIZATION OF OPERATION ON THE MARKET TO BOOST THE LONG-TERM. TOM: YOU WOULD LIKE TO SEE SANCTIONS GO AWAY. A NEW DIALOGUE BETWEEN RUSSIA, SOME SUGGEST PRESIDENT TRUMP WILL TURN TO RUSSIA AT THE EXPENSE OF CHINA, HAVE YOU CALCULATED WHAT IT WOULD MEAN FOR ECONOMIC GROWTH IN RUSSIA IF YOU WERE TO SEE AN ELIMINATION OF THOSE SANCTIONS? >> WE HAVE ALREADY ADJUSTED TO THE SANCTION ENVIRONMENT, WHAT IS TRUE IS THERE IS ACTION FOR GROWTH IN RUSSIA. IT WILL BE BENEFICIAL FOR ALL PARTIES TO ELIMINATE THESE. TOM: YOU HAVE ADJUSTED TO SANCTIONS WHERE YOU DO NOT CARE ABOUT THE SANCTIONS? >> WE ARE NOT DEPENDENT ON THE INTERNATIONAL FINANCIAL POLICY, THE BALANCE OF PAYMENTS IS HEADING -- WE CAN FINANCE ALL THE FINANCES OF THE ECONOMY BY DOMESTIC, WE DO NOT NEED EXTERNAL FINANCING AND SANCTIONS DO NOT IMPACT US THAT MUCH. FRANCINE: TOM IS A HUGE FAN OF MATHEMATICS, WOULD SANCTION RELIEF DIRECTLY IMPACT THE RUBLE? >> OF COURSE BECAUSE THEY MIGHT BE STRONGER INFLOWS GOING INTO THE ECONOMIES BECAUSE OF THE OPPORTUNITIES -- IF YOU LOOK AT THE PAST COUPLE OF YEARS, RUSSIAN DOMESTIC BONDS WERE THE BEST GLOBALLY AND THOSE NOT INVESTING FRANCINE:FRANCINE: -- HAVE YOU MODELED ABOUT HOW MUCH SANCTION RELIEF, THE SANCTIONS ARE LIFTED , WE DO NOT KNOW WHETHER THAT IS THE CASE, BUT IF THEY ARE LIFTED RIGHT NOW, HOW MUCH PRESENTED FLUCTUATION DO WE SEE IN THE RUBLE? >> NOT MUCH BECAUSE WHAT MIGHT CHANGE IS THE STRUCTURAL IMPULSE, IF YOU LOOK AT THE PAST YEAR, THERE WAS>> NOT MUCH BECAUSE WHAT MIGHT CHANGE IS THE STRUCTURAL IMPULSE, IF YOU LOOK AT THE PAST YEAR, THERE WAS HUGE FLOW INTO THE GOVERNMENT BOND MARKET. WE SEE INCREASING. TOM: ONE FINAL QUESTION, DELICATE, I WILL PHRASE THIS CAREFULLY COME YOU CAME INTO OFFICE AS THE ECONOMY MINISTER UNDER A CLOUD, NOT YOU, MR. BRUTON HAS BEEN -- PUTIN HAS BEEN IN POWER FOR YEARS, AS YOU SEE THE INNER OFFICES OF THE KREMLIN, IS THERE A NEW GOVERNMENT, A NEW TONE UNDER VLADIMIR PUTIN OR BUSINESS AS USUAL AS WE HAVE SEEN OVER THE LAST FIVE OR SIX YEARS? >> A COMMITMENT TO CHANGE THE ECONOMY TO MAKE IT BETTER IN TERMS OF GROWTH AND PROSPERITY OF THE PEOPLE THERE -- PEOPLE. FRANCINE: VERY DIPLOMATIC. TOM: HE IS EXPERIENCED IN PRACTICE. FIVE MORE LAST QUESTIONS. [LAUGHTER] FRANCINE: BUSINESSMAN AND BUSINESS WOMEN, AT THE TOP OF THEIR COMPLAINTS THIS INTEREST RATES AND THE FACT THEY ARE TOO HIGH. >> IF YOU LOOK AT THE PULSE OF THE ECONOMY, THE KEY STORY IS ECONOMIC UNCERTAINTY AND NOT LOW INTEREST RATES. FRANCINE: WHAT CAN YOU DO TO POST -- BOOST GROWTH? >> INFLATION TARGETS AND RESPONSIBLE FISCAL SITUATIONS, THESE WILL BRING STABILITY AND WHAT WE SEE LATE LAST YEAR AND THE BEGINNING OF THIS YEAR IS THE GROWTH PICKING UP AND THE GROWTH MIGHT LIFT THE PRICE OF THE MARKETS IN RUSSIA. TOM: STEVEN MNUCHIN WILL TESTIFY TODAY TO BECOME THE TREASURY SECRETARY, WHAT DO YOU NEED FROM THE DONALD TRUMP ADMINISTRATION? >> WHAT WE NEED IS -- INSIDE RUSSIA NOT OUTSIDE RUSSIA. FRANCINE: I WANT TO FOCUS ON INSIDE RUSSIA. WHEN YOU LOOK AT PRIVATIZATION WHICH WAS THE BIG STORY COMING OUT OF RUSSIA IN DECEMBER WITH THE 19.5 STAKE , PEOPLE SAY IT WILL NEVER BE SOLD, THAT WAS NOT THE CASE, DOES ITS FOR YOU IN DOING MORE PRIVATIZATION AND WHAT IS NEXT? >> WE WILL CONTINUE, WE WILL GREATER INCREASE OUR STAKES -- THE NEXT COMPANY ON SOFT CONSORT, A SHIPPING COMPANY. FRANCINE: WAS IT A SUCCESS? >> OF COURSE. FRANCINE: OTHER COMPANIES. >> WE HAVE A LONGER-TERM PLAN AND WE WILL WORKING ON ASSETS AND DETERMINING THE RIGHT TIME. THE FIRST THAT IS SOFT CONSORT AND WE WILL DO THAT STEP BY STEP. FRANCINE: DO YOU WORRY ABOUT INFLATION? I DO NOT MODEL I WERE THE, TOM KEENE DOES, INFLATION IN RUSSIA HAS BEEN A CONCERN FOR MANY YEARS. >> I WORRY MORE ABOUT INFLATION -- INFLATION EXPECTATIONS, WE SURE A SHARP DECLINE IN THE INFLATION RATE -- WE SAW A SHARP DECLINE IN THE INFLATION RATE BUT THE MAIN PROBLEM IS INFLATION EXPECTATIONS. THE GOVERNMENT AND THE CENTRAL BANKS WILL BE WORKING TOGETHER. TOM: THE DOMESTIC CRY LIMIT, HOW DO YOU ESTABLISH AN ANCHOR OR BELIEF IN DISINFLATION? >> TIME IS NEEDED. FRANCINE: WHAT IS THE ONE MESSAGE -- I IMAGINE YOU ARE MEETING WITH FELLOW MINISTERS OF THE ECONOMY FROM WORLD LEADERS, WHAT IS YOUR MAIN MESSAGE, WHAT DO PEOPLE MISUNDERSTAND ABOUT RUSSIA AND ITS ECONOMY? >> THERE IS EXPECTATIONS THAT WE WERE DOING BAD IN TERMS OF ECONOMIC PERFORMANCE BUT THE MAIN STORY IS THAT WE MAY SURPRISE AND THOSE WHO DO NOT

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Oreshkin: Russia Supports Fully Floating Ruble Rate

Russian Economy Minister Maxim Oreshkin talks about oil exports and Russia's ruble policy and explains the impact of trade sanctions on the Russian economy. He speaks from the World Economic Forum in Davos, Switzerland on "Bloomberg Surveillance." (Source: Bloomberg)

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