MOSCOW: President Vladimir Putin on Wednesday dismissed growing speculation about an imminent currency devaluation as the Russian ruble hit five-year lows amid growing capital outflows and diminishing central bank support.

The Russian leader said a day after a meeting with Central Bank chief Elvira Nabiullina that the government welcomed greater ruble flexibility that could reinvigorate sluggish growth.

The Central Bank had announced earlier this month that it was withdrawing “targeted” daily currency trading interventions as it moves toward a fully floating exchange rate by the start of next year. “The Central Bank is now only partially involved in currency regulation,” Putin said during a meeting with university students in Moscow.

“And the freer the Russian currency, the better -- in the long run -- it will be overall because this will force the economy to be more effective.” Putin added that Nabiullina “did not say anything at all” about a government-orchestrated currency devaluation that could help Russian industry by making the country’s goods more competitive abroad.

He spoke only moments before Industry and Trade Minister Denis Manturov told parliament that Russia’s industrial production rate “managed to reach 2012 levels” after being in decline for most of the year.

The Russian ruble has hit five-year lows this week against the Central Bank’s foreign currency basket of dollars and euros -- a politically worrying trend for the Kremlin because of the accompanying rise in the cost of living.

It stood at 33.89 against the greenback and 45.99 against the single European currency in evening trading -- rates not seen since the worst months of Russia’s 2008-2009 financial crisis.—AFP