During the New Year holidays, the Moscow Stock Exchange will trade on the foreign exchange market from January 3 to January 5. According to the forecast of Sovcombank chief analyst Mikhail Vasiliev, the dollar will cost during the holidays 88-92 ruble, euro – 96-101 ruble, yuan – 12.2-12.8 rubles.
“Many financial market participants will not be present in the foreign exchange market from January 3 to January 5. The market will therefore be “weak” and subject to strong fluctuations in both directions, including speculative ones,” the analyst explained.
Doctor of Economic Sciences, Professor of the Department of State and Municipal Administration of the Financial University under the Government of the Russian Federation Yuri Shedko does not expect sharp changes in the dollar and euro exchange rates during the New Year holidays.
“Like the whole world, Russia wants to celebrate the New Year 2024 without tremors and unrest. Russians should not buy dollars and euros for speculative purposes during the holidays. The economist said there will be a big difference in foreign exchange buying and selling prices.
January June
Starting from January 9, the main players will return to the financial market and the ruble rate will depend on fundamental factors. Vasiliev expects a moderate strengthening of the Russian currency in the first quarter of 2024.
“January-March is traditionally a favorable period for the ruble due to the seasonality of the balance of payments. The beginning of the year usually experiences low business activity due to the long New Year holidays. Foreign exchange demand for import purchases, foreign tourist trips and foreign debt payments will decrease in January. “In addition, budget expenditures may also decrease in January,” he said.
Vasiliev also believes that the supply of dollars and euros in Russia will remain high due to the forced sale of foreign exchange earnings by the largest exporters. He noted that oil prices are likely to remain near current levels due to the winter warming season. (For example, the price of a barrel of North Sea Brent oil is currently over $77).
In addition, starting from the beginning of 2024, the Central Bank of the Russian Federation may increase yuan sales within the scope of budget operations.
“In January, the volume of yuan sales will increase from the current 0.8 billion to 4-5 billion rubles per day. This factor will also favor the ruble exchange rate.” High ruble interest rates will also support the national currency,” Vasiliev said.
Starting from December 18, the key rate of the Bank of Russia increased to 16%. Following the Central Bank, banks also increase deposit and loan interest rates. High credit rates reduce consumer and investment demand, including imports, and also reduce the demand for foreign currency, and an increase in ruble deposit rates leads to an increase in demand for them, which contributes to the strengthening of the ruble exchange rate. .
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“The behavioral pattern of citizens is already shifting from consumer to savings, including deposits of 15-17 percent. The cost of the dollar will increase due to the low demand for foreign currency in the first four months 85 ruble, euro – 93 ruble, yuan – 11.9 ruble,” Vasiliev remarked.
Digital Broker analyst Natalia Pyryeva expects the dollar to be 90-95 rubles and the euro to be 99-103 rubles in the first quarter. It is better to buy foreign currency when it becomes cheaper, that is, in the first four months of the new year.
Vasiliev explained that a particular risk for the ruble exchange rate could be the possible cancellation of the compulsory sale of foreign exchange earnings to the largest exporters, which is expected to take place in mid-April. This could reduce the money supply on the Russian market, which could push the ruble down.
The next month, May, traditionally sees an increase in foreign currency demand, including from tourist trips to Turkey, for example. As the demand for dollars and euros increases, their rates also increase.
According to Vasiliev’s forecasts, by mid-2024 the dollar will cost 95 rubles, the euro will cost 104 rubles, and the yuan will cost 13.2 rubles.
Candidate of Economic Sciences at the Russian University of Economics, Associate Professor of the Department of Global Financial Markets and Fintech, admitted that if current trends continue, the dollar may weaken slightly in June, falling to 95 rubles. GV Plekhanova Denis Perepelitsa. Moreover, in the event of a global recession, the cost of the dollar may increase 110 The economist believes that the ruble will rise in June.
July – December
The second half of the year is generally less favorable for commodity prices. Vasiliev expects a slowdown in the global economy in 2024 due to high interest rates in the USA and Europe. According to analyst estimates, Brent oil prices will drop from 85 dollars per barrel at the beginning of 2024 to 75 dollars per barrel at the end of the year. Vasiliev also expects the start of the Central Bank’s cycle of reducing interest rates to 12% by the end of 2024. He believes that ruble interest rates on deposits and loans will fall and geopolitical and sanctions risks cannot be ignored.
All this together will contribute to the depreciation of the ruble.
Vasiliev believes that, in general, the ruble exchange rate in 2024 will be subject to less fluctuation than in 2022 and 2023. The dollar will cost 85-100 rubles, the euro 93-109 rubles, and the yuan 11.9-13.7 rubles.
BCS Forex analyst Anatoly Trifonov admitted that the average dollar exchange rate in 2024 will be 86.6 rubles, which will be slightly worse than the 2023 level.
“If the dollar exchange rate consistently exceeds the 100 ruble limit again, new administrative measures will be taken. “These include tightening restrictions on capital outflow, a ban on paying dividends and loans abroad, including in rubles, a ban on lending to foreign trade units, and a limit on the withdrawal of rubles from abroad,” Vasiliev noted.
He added that the list of measures could also include an increase in the key interest rate to 17-20 percent, an increase in the sale of yuan from reserves, a ban on Russian companies buying back their shares from abroad and a slowdown in growth. Exit of foreign companies from the Russian Federation.
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Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.