Spring growth: why the ruble soared against the yuan

The ruble exchange rate continues to rise against the major currencies. On the Moscow Stock Exchange, the yuan dropped by four cents on April 15, continuing its multi-day downward trend. A similar situation in the interbank market is observed with the dollar. There are many reasons for this decline, and it is not yet clear when the ruble's growth may stop. Experts note that this process has both clearly positive and negative sides. The first is the reduction of inflation due to cheaper imports, the second is the deterioration of the budget situation. Details can be found in the Izvestia article.

What is the exchange rate of the yuan to the ruble and the dollar to the ruble on April 15

During the trading session on April 15, the yuan lost about 8 cents against the ruble, dropping to 11.12. At some point, the Chinese currency was even lower. Thus, the trajectory of the previous day was continued, when the yuan immediately dropped by a percentage. In total, since the end of January, the "Chinese" has lost about 2.5 rubles — the fall has become one of the longest in recent years.

The situation is similar with the dollar. The US currency has dropped by as much as 15 rubles on the interbank market since the beginning of February. However, unlike the yuan, which declines more evenly, it reached its lows in mid-March, after which it increased significantly. Now, the dollar exchange rate is falling closer to 80 rubles again.

Why is the ruble getting more expensive

The fall in the dollar is mainly due to geopolitics — the negotiations between the United States and Russia have had a positive impact on the position of the Russian currency. That is why, by the way, the dollar went up in the second half of March, when it became clear that there would not be a quick breakthrough in resolving the Ukrainian crisis yet. In recent weeks, the situation around Trump's new tariffs, which did not affect Russia, has also been added as an additional factor. It is noteworthy that the parallel drop in oil prices did not particularly affect the ruble exchange rate.

The yuan is more interesting. Former deputy chairman of the Bank of Russia Oleg Vyugin suggested that the demand for Chinese currency in Russia has fallen because Russian importers are increasingly using "crypta" in settlements with Beijing. Indeed, cryptocurrency can be an effective way to circumvent the ever-tightening sanctions. However, this explanation is not the only one.

The tax period begins in March and April: exporters bring money to the budget, for which they need to buy in rubles. Traditionally, the exchange rate of the Russian currency is in positive dynamics during these months. In addition, macroeconomics factors have remained constant in recent months. The key interest rate in Russia remains prohibitively high, which can attract capital with any positive news. At the same time, the external debt repayment factor, which was relevant in the previous few years, is gradually becoming weaker. The demand of citizens is also low against the background of extremely high rates on deposits of individuals in banks — it is now impractical for many to invest anywhere except on a deposit.

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Finally, the general conjuncture of the global market is important. The tariff war in the world has very definite effects. For example, China's logical response to the harsh duties imposed by the Trump administration is not only to impose its own counter tariffs, but also to weaken the yuan in order to support its exporters. Perhaps this is why the Chinese currency is weakening more clearly and consistently compared to the dollar.

The consequences of the strengthening of the ruble

The situation is ambiguous for the Russian economy. The strengthening of the ruble by almost 20% by the beginning of the year is positive from the point of view of combating inflation. A significant part of the country's consumer goods are imported, and as a result, a strong ruble will slow down price growth.

At the same time, there may be problems both with supporting our own manufacturer, which will have to compete with cheap foreign goods, and with filling the budget, especially in the context of falling oil prices.

It is possible that the authorities in the current situation may try to devalue the ruble a little in order to reduce the burden on public finances.