Russian Finance Minister Anton Silaunov told the country's Upper House of Parliament on Thursday that the country's currency crisis is over. He claimed the rouble is strengthening, reports Daily Times.

According to Bloomberg, the rouble gained 1.5 percent to 52.65 per dollar by 5:27 p.m. in Moscow, although the Russian currency still logged the worst performance among 170 tracked by Bloomberg because it lost 27 percent versus the greenback in the past three months.

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Currency stability was achieved by a series of economic measures such as the increase in interest rates to 17 percent from 10.5 percent, cuts in export of grains and informal capital controls.

Silaunov promised to lower the key lending rate if Russia's financial situation would further stabilize.

In defending the rouble, Russia's international reserve level lost $15.7 billion last week, the largest drop in six years, leaving its stockpile US$398.2 billion as of December 19. That amount includes the reserves of Bank of Russia and two sovereign wealth funds.

The defense was by selling US$4.8 billion through market interventions and the provision of US$9.8 billion foreign currency repurchase agreements.

Such kind of support is no sustainable even in the medium term, warned Bank of America chief economist for Russia Vladimir Osakovskiy.

However, Andrei Belousov, the economic aide of Russian President Vladimir Putin warned that inflation rate would likely rise to 11 percent by the end of 2014, breaching the psychological barrier of 10 percent for the first time since the 2008 global financial crisis.

The series of economic setbacks, triggered by the western sanctions for Russia's annexation of east Ukraine and weaker oil prices, would also result in higher budget deficit next year than the earlier projection of 0.6 percent of the country's gross domestic product, the finance minister said.

Earlier this week, Standard & Poor's had said it would downgrade Russia's credit rating to junk by January because of the rouble's weakening. Russian officials plan to talk to other credit rating agencies to explain its actions to avert more downgrades.

TagsRussia, currency crisis, inflation, ruble, Anton Silaunov, russian economy