‘Putin keeps ace up his sleeve to surprise market’

President Putin has not disclosed his future strategic plans during the annual Q&A since to surprise international markets one should always have an ace up the sleeve, French economist Jacque Sapir told RT.

Sapir said he is quite optimistic as it “is pretty obvious in the short run that Russia has all the means available to deliver a very strong shock on the foreign exchange market.”

“It actually did so on Wednesday,” he said. Now the question is how long it will take before Russia can stabilize the situation with its economy in the long-term. In that respect, “President Vladimir Putin has not given any positive information,” on the matter, the expert added “because it is very important to keep some ace in your sleeve if you want to surprise the market.”

“Sanctions are giving some opportunities for the Russian economy to develop, and the same thing is with the depreciation of the ruble,” Sapir said. But for that to happen, he said, it is important that new enterprises or already existing businesses “could find investment and borrow money at a relatively cheap price.”

But that conflicts with the Russian Central Bank’s current policies, the analyst observed.

“The Central Bank hiked its interest rates…because it wants to fight speculation. But if interest rates are to stay at the current level that is 17 percent a year it will be absolutely impossible for the Russian economy to take advantage of the sanctions and of the depreciation of the ruble,” Sapir told RT.

READ MORE: ‘Can’t stuff this bear’ & other Putin Q&A quotes

Moscow has established strong links with Beijing, the expert said.

“There is a swap agreement between Russia and China and to some extent the Chinese Central Bank could provide some currency for the Russian Central Bank. But for the long-term it will be very important to reintroduce some kind of regulation on the capital market… and to provide some means of stopping speculation at a high level,” Sapir added.

John Butler, Chief Investment Officer at Amphora Capital told RT that Russia’s strengthening ties with China, India, and Turkey, and with some central Asian countries will start to bear fruit.

“I think Putin is right to say that it may be a while before the economy can begin to get out of the slump. When you look at the basic fundamental longer-term profile of the Russian economy versus those of the West, the Russian economy probably is the most sustainable path, it is the West that still has to deleverage, that is the West that has to sort out its excessive debt, it is the West that has to find the way to grow more sustainably,” he said.

“If you look at the ruble on any reasonable set of metrics for determining how strong a currency should be it has tremendous advantages fundamentally: you have a very large and growing economy, one that’s increasingly diversifying, it is a huge net exporter, very low external government debt. The only reason why probably the ruble came under attack has nothing to do with the fundamental longer terms strength of Russian economy but rather simply the immediate liquidity issues… Russian companies are being increasingly shut out of the Western financial system as a result of the sanctions,” he said.

Political commentator Alexander Nekrassov said that President Putin in the Q&A made a very good analysis of the situation including relations between Russia and the West.

“On balance he is blaming the West for spoiling those” Nekrassov said.

“He was quite adamant and strong on the point that the Crimea issue is a done deal, nobody is going to return to it. He also stressed that the crisis in Eastern Ukraine has to be decided by the Kiev government, it is an internal issue. Russia has no direct influence over it but Russia is prepared to help solve the crisis,” he said. “Some of the Western governments primarily the Americans are trying to interfere in these relations [with Russia’s Eastern allies]; they try to somehow spoil them. President Putin showed by his speech that Russia is confident, is not going to give in into any sort of blackmail.”

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.