According to the Moscow Stock Exchange, at 11:40 Moscow time, the maximum levels of the dollar and euro at the auction were 90,7225 rubles and 99,985 rubles, respectively.
Under current conditions, the “bottom” of the ruble can be 100 rubles per dollar and 110 rubles per dollar. – for one euro, the chief analyst of Sovcombank Mikhail Vasiliev estimated.
“This is a serious recession in the global economy, provided there are no large-scale external shocks – for example, with Brent oil falling to $40-50 per barrel. In such a scenario, the dollar will grow by 43 percent since the beginning of the year and 64 percent from November against the national currency,” he said.
Vasiliev explained that this year, the capital outflow of the ruble, the demand for foreign currency exceeding the domestic supply, the Russian balance of payments are under pressure due to the decrease in the current account surplus (i.e. more money going abroad). more than enters Russia). According to the estimations of the Central Bank, the surplus, which was 233 billion dollars in 2022, will decrease fivefold in 2023 to 50 billion dollars. Then, thanks to the surplus, the ruble exchange rate was strong and amounted to 55-65 rubles per dollar.
According to the analyst, some of the foreign currency revenues are not returned to Russia, but remain in foreign accounts. The ruble is also responding to the increase in the demand for the dollar and the euro.” The regulator noted that this has had a slight impact on the course as the situation has stabilized.
The head of the analytical department of Zenit Bank, Vladimir Evstifeev, noted that a lower ruble rate is comfortable for the budget. According to the expert, the cost of one barrel of oil in national currency, which is favorable in this respect, with a decrease in production and exports this year, is about 5.3 thousand rubles. Evstifeev said that if we take into account that the average price of Ural oil per barrel this year is 57.5 dollars, the dollar rate is about 92 rubles. Speculative strategies, he added, should also consider a certain margin for volatility as oil prices fall below positive values.
“So a comfortable dollar rate for the budget is in the range of 87-100 rubles. You can consider the level of 100 rubles. “The dollar is a potential peak for the ruble’s weakening,” Evstifeev said.
According to him, it marks more than 100 rubles. does not carry budget policy and foreign trade preferences per dollar. At the same time, there is a risk that the dynamics of exchange rates will enter an uncontrollable plane, which is dangerous for the financial market and the economy as a whole.
Under what conditions will the ruble “bottom”
In the base scenario, Vasiliev expects the ruble to remain in the range of 85-95 rubles per dollar, 94-105 rubles per euro, and 11.8-13.2 rubles per yuan by the end of the year. Natalya Lavrova, chief economist of BCS World of Investments, described 82-86 rubles for an “American” as a baseline level for 2023.
Vasiliev said that in the event of a sharp fall in oil prices – below $70 per barrel – the national currency could approach the levels of 100 rubles per dollar and 110 rubles per euro.
Russian University of Economics, World Financial Markets and Fintech Department Lecturer Assoc. GV Plekhanov Denis Perepelitsa agreed that further devaluation of the ruble would be possible in the event of the introduction of new sanctions or the passage of hostilities on the territory of central Russia. Anton Prokudin, chief macroeconomist of Ingosstrakh Investments Management Company, did not rule out that the ruble could “bottom” this year and that the devaluation will continue next year.
However, some experts consider the development of such a scenario unlikely. Uralsib Bank chief economist Aleksey Devyatov expects higher oil prices to help bolster the ruble.
Roman Chechushkov, head of investment analytics at Renaissance Bank, stressed that the depreciation of the ruble in recent months did not raise officials’ concerns about the country’s financial stability. In particular, the Central Bank has declared that it will not interfere with the exchange rate unnecessarily.
“Inflation will approach double digits”
According to Vasiliev, the prices of cars, household appliances and electronics, travel packages abroad and medicines will increase in the coming months due to the weakening of the ruble (at the current exchange rate). He added that on the backdrop of the general price increase and increasing consumer demand, other companies that are not directly related to imports may also increase their sales prices.
“If the dollar rate is fixed above 90 rubles. and move to 100 rubles. inflation will approach double digits and the key rate will need to be increased to 9-10% or even higher (currently 7.5% per year. – socialbites.ca),” stressed the analyst.
As a result of accelerating inflation, loans will become more expensive for citizens. “The growth of the key rate will require an increase in loan interest rates, yields on federal loan bonds, and subsequently mortgage rates,” Vasilyev said.
The rapid depreciation of the ruble is unfavorable for the Central Bank of Russia and the government, as it raises devaluation and inflation expectations, raises the costs of importers, and increases risks to financial stability.
So, according to the analyst, when the ruble moves to the 100 ruble mark. For the dollar, authorities are using mechanisms to maintain the ruble exchange rate: increased verbal interventions, the sale of yuan from reserves by the Central Bank, the forced sale of exporters’ foreign exchange earnings, increased restrictions on capital outflows, and an extraordinary increase of a few percentage points in a key rate.