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Trump and Putin will not live happily ever after, this concept is a 'fairytale': Rusal president

The idea the U.S. administration would be able to normalize ties with Russian President Vladimir Putin is the stuff of fairytales, according to the president of the world's largest aluminum company.

Rusal President Oleg Deripaska told CNBC he believed it is unrealistic to expect U.S. President Donald Trump and the rest of his administration to soothe relations with Russia, despite Washington's recent calls for improved ties with Moscow.

"We all tend to believe (in this) kind of fairytale but there is a reality … You know Trump and his administration needs to prove that they would be capable to change (the) economic reality in the U.S.," Deripaska said in an exclusive interview with CNBC on Tuesday.

President Trump's attempts to improve relations with the Kremlin have been hampered by his team's connections to Russia which allegedly date back to the election campaign. U.S. intelligence agencies also found that Moscow had hacked Trump's Democratic rivals during the election process.

An employee polishes traditional Russian wooden nesting dolls, Matryoshka dolls, depicting US President-elect Donald Trump (L) and Russian President Vladimir Putin at a gift shop in central Moscow.
Alexander Nemenov | AFP | Getty Images
An employee polishes traditional Russian wooden nesting dolls, Matryoshka dolls, depicting US President-elect Donald Trump (L) and Russian President Vladimir Putin at a gift shop in central Moscow.

Music to the world's ears

Russian tycoon Deripaska described himself as a "reasonable optimist" for the future of Trump's presidency and highlighted the New York businessman's ambitious infrastructure plans as reason to be positive.

Trump announced at the beginning of March he would seek approval from Congress for a $1 trillion infrastructure bill.

When asked whether this would be music to the aluminum giants ears, Deripaska quipped, "Its music for the whole world".

Rusal could be poised to make significant gains should Trump's massive infrastructure plans acquire approval from Congress yet Deripaska urged caution as the new U.S. president adapted to his role.

"It's (Trump's) first public job… He maybe needs a year to understand how to rule, how to actually steer an economy (and) his government and raise support," Deripaska said.

Strange contradiction

Meanwhile, investor expectations for a March interest rate hike in the U.S. have skyrocketed ahead of the Federal Open Market Committee meeting on March 14-15. Federal Reserve Chair Janet Yellen signaled an interest rate rise this month is likely.

Deripaska conceded Rusal's growth prospects could be damaged by more than one interest rate hike from the U.S. central bank in 2017.

"It would be very strange (if the Fed raises rates several times), it would contradict what U.S. needs… It would be very difficult to maintain high debt levels with high interest (rates)," he concluded.