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The ruble strengthened 18.9 percent against the US dollar in real terms in 2003, and the real effective exchange rate of the ruble rose 4.1 percent, according to the Economy Ministry's report on the social and economic development of the country in 2003. These indicators meet the targets envisaged in the "Guidelines of the single state monetary and credit policy for 2003".
In the estimation of the Economy Ministry, the real effective exchange rate of the ruble dropped 0.9 percent in December 2003, mainly due to the ruble's weakening against the euro in real terms.
"The negative impact of the ruble's strengthening on the competitiveness of Russian goods compared to imported products is somewhat offset by the more favorable dynamics of the euro's exchange rate," the report says. The ruble weakened against the European currency by 1.6 percent in real terms last year. The euro zone countries account for about a third of Russian imports.
Another factor that contributed to the strengthening of the ruble against the dollar was the weakening of the US currency on the international market. The dollar lost 5 percent of its value against the euro in December.
According to the Economy Ministry, real personal disposable incomes rose 14.5 percent in 2003 compared with the previous year. In the fourth quarter, they increased 17 percent. In the estimation of the Economy Ministry, about a quarter of this rise was due to the conversion of foreign currency savings into rubles.
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