the state of Health of the Russian currency is deteriorating by the hour. Two days in a row its temperature, that is, exchange rate kept close to disappointing marks in 72-73 ruble per dollar and 85 rubles per Euro. The questions arise: what is happening and what to expect? The patient is more alive but fears for his health too serious, and the symptoms of trouble is obvious.
it Seems that we are talking about cumulative effects. Factors working for the devaluation, enough — both immediate and long-term. Then the easing monetary policy of the Central Bank, and the tightening of sanctions rhetoric from the United States, and the decline in demand of non-residents in the Russian OFZ, and persistent fear of markets according to the hypothetical second wave of coronavirus.
the value of the Euro during trading on the Moscow exchange for the first time since the beginning of April rose above $ 85. The “wood” with the battle tried to recover some lost positions, but the attack failed. Despite the fact that the exchange ratio is changing every day and mixed with a large amplitude, we can state: Russian banknotes fully exhausted the potential of reinforcement that maintained the exchange after the March collapse. Suffered a setback for a line where the ruble is at risk of getting stuck for a long time. And this is when the price of oil at $43 per barrel, that is at quite comfortable level value of “black gold”, which often provides support to the Russian currency.
you Can rely that the domestic economy is not in the best condition, and national targets — for example, the entry in the top 5 of world economic powers — move in indefinitely. But that’s the General background. “In our case, the collapse of the ruble is a very specific one-time background,” says doctor of Economics Igor Nikolaev. In his view, it’s all about the active reduction in Central Bank key interest rate. As a result, investors don’t want to actively invest in ruble-denominated financial instruments: at a rate of 4.25% (prior to this level, the Bank of Russia has lowered the rate at the last meeting of the Board of Directors), it becomes obviously unprofitable and risky business.
Could something swing rate up in the near future? Only if there is a tangible increase of oil prices, but such a scenario is unlikely. The demand for hydrocarbons while the sluggish and, apparently, to its former level will reach not soon. In addition, France has begun to assemble the experimental tokamak-reactor in the framework of the international ITER project and with the active participation of Russia. His goal is to prove the technical feasibility of producing unlimited fusion energy for peaceful objectives, to find an alternative to fossil fuels. Of course, Nikolaev notes, such events inevitably impact on raw material prices and foreign exchange rates. For Russian oil and gas industry, from production and export��tion of the success which the domestic economy depends, it’s not the most pleasant news.
the position of the ruble influenced the strengthening of the Euro against the dollar is now experiencing an obvious problem, says the head of analytical Department AMarkets Artem Deev. In addition, I agree to the expert, investors have significantly reduced investments in the Russian OFZ. Further, in accordance with the dynamics of oil prices, the ruble may weaken to 74-75 in tandem with the dollar and 85-87 in tandem with the Euro. Oil demand is not yet recovering to previous values, due to too slow a reduction in the volume of world reserves.
the ruble was also crushed investors ‘ concerns about the second wave of the pandemic — if this happens, the pessimism in the markets will prevail, and the currencies of developing countries re-roll on an inclined plane. The instability of the ruble adds and adds financial analyst FxPro Alexander Kuptsikevich that by July Russia completed the process of resuscitation of business activity, which amounted to approximately 60-80% of pre-crisis levels. It is not possible to count on the full recovery of exports. In the worst scenario, the dollar by the end of August can get up to 75-77 rubles, while in December — up to 80 rubles.