Russia will face deflation in June, according to Economy Minister Maxim Resetnikov, with consumers tending to save instead of spending.
Speaking at a conference in a business lobby in Russia, Reshetnikov said demand in the Russian economy remained low.
He predicts that if the ruble remains at the level it is now for months, companies will have to reduce their production.
He stated that “we have a surplus supply of foreign exchange in the market”, while he characterized the level of the currency (ruble) as a key issue for the economic policy of the country.
Earlier, Finance Minister Anton Siluanov said Russia could cut some government spending to raise funds for foreign exchange intervention.
His remarks come as Moscow looks at ways to impose a limit on the ruble’s rise, making imports more expensive.
With Russia looking for ways to mitigate the damage from Western sanctions, Siluanov said the ministry would also propose allowing export-oriented businesses to receive cash from non-nationals.