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- More than a hundred to one: the ruble exchange rate will consolidate around 105-107 per dollar by the end of the year
More than a hundred to one: the ruble exchange rate will consolidate around 105-107 per dollar by the end of the year
The ruble exchange rate will consolidate around the level of 105-107 per dollar and will remain there until the end of the year, according to experts interviewed by Izvestiya. On November 26, the "American" and "European" approached the historical highs of 2022, and the MosBirch index collapsed below the 2,500-point mark. The market is falling amid the escalation of the Ukrainian conflict and new U.S. sanctions, which hit Russian exports. At the same time, the authorities, apparently, do not plan to stabilize the exchange rate, as it is profitable for the Ministry of Finance against the backdrop of a deficit budget. How the situation in the financial market will affect inflation - in the material "Izvestia".
Fall of the Moscow Exchange Index and the ruble exchange rate
November 26, Mosbirji index collapsed below 2500 points for the first time since March 2023, follows from the data of the site. For the week it fell by 6%, and since the beginning of the year - by 20%.
At the same time, the ruble is weakening against the world's major currencies - the dollar rate is fixed at a three-digit level and traded at 107.7 rubles on November 26, while the euro reached 113 rubles, follows from the data of the Trading View.
At Moscow Exchange, operations with Western currencies are not conducted now, while the Central Bank sets the rate on the basis of the interbank market once a day. According to the latest data, the dollar will cost Br105 in Russia on November 27 , while the euro - Br110.5.
The dollar and euro rates on November 26 - the maximum since the spring of 2022, when the ruble weakened sharply against the background of special operations in Ukraine. Only since the beginning of this year, the ruble has weakened against the "American" by 20.5%, and against the "European" - by 15%, follows from Trading View data.
Thefall in the Mosbirji index and the ruble is primarily due to the growth of geopolitical risks, said Ivan Efanov, analyst at Tsifra Broker. In recent days, headlines in the news feeds are becoming more and more alarming - the market is now very keenly reacting to any political news. Because of this, quite sharp jumps in quotations are possible in the next month, he noted.
The new U.S. sanctions have affected the infrastructure of payments for exports, recalled Vladimir Chernov, an analyst at Freedom Finance Global. Restrictions against Gazprombank and other small players have cut the ability to pay for Russian natural gas. Because of this, less currency from raw materials supplies began to flow into the Russian Federation, and a shortage of it formed on the market - after the new sanctions were imposed, the ruble fell by 5.6% against the dollar in just 3.5 trading days.
In the next month, the ruble will consolidate in the neighborhood of 105-107 per dollar, believes analyst of FG "Finam" Alexander Potavin. Freedom Finance Global shared a similar forecast - they believe that the ruble will trade around Br103-105.
In the future, the pair may return to the highs of 2022 - about 121 per "American", the only question is when it will happen, according to Finam. If the price of Brent oil will fall around $60 per barrel, the weakening of the national currency will happen much faster.
The three-digit rate of the dollar to the ruble, apparently, at least for a long time, concluded Alexander Potavin.
Why the market is falling against the weakening of the ruble
A weak ruble exchange rate promotes export growth, Russian Finance Minister Anton Siluanov said at the plenary session of the IX International Forum of the Finance University on November 26.
- I'm not saying the exchange rate is good or bad. I'm just saying that today's rate for exporters is very, very even conducive to exports, - said the head of the Ministry of Finance.
Therefore, the weakening of the ruble usually leads to the growth of the Moscow Exchange index, said analyst of FG "Finam" Alexander Potavin. It mainly consists of shares of Russian exporters, and they receive revenue in foreign currency, which is becoming more expensive. Now the logic has changed: the weaker the ruble is, the higher the probability of inflation acceleration and growth of the key rate.
TheRussian stock market is now depressed because of the Central Bank's tough policy, emphasized Alexander Potavin. Against the background of record rates, investors are taking their free money to deposits or investing it in short, reliable bonds. But they are not expanding production.
The fall of the Moscow Exchange Index against the backdrop of the weakening ruble and good company reports only confirms that the market is now highly dependent on the geopolitical agenda, added Ivan Efanov.
Nevertheless, Russian exporters in any case will benefit from the weakening of the national currency, and the growth of their income will help stabilize the budget deficit of the country (in 2024 it is expected to be 3.3 trillion rubles, or 1.7% of GDP), said an expert on the stock market "BKS World of Investments" Michael Zeltser. This will help to compensate for their losses due to the reduction in physical volumes of supplies abroad, said economist Andrei Barkhota.
At the same time, the EU announced a new, 15th package of sanctions against Russia, which may be adopted by the end of the year, added Freedom Finance Global analyst Vladimir Chernov. It may include restrictions on the operation of 45 Russian oil tankers, which in the long run will still reduce the revenues of the already deficit budget of the Russian Federation.
What will happen to the ruble exchange rate by the end of the year
Demand for currency in Russia traditionally increases in the pre-holiday period due to the growth of imports, said Vladimir Chernov. Russians before the New Year actively buy gifts, as well as spend money on traveling, which disperses demand. This could easily lead to further depreciation of the ruble.
Toward the end of the year, the Ministry of Finance will significantly increase budget expenditures, added Alexander Potavin from Finam. Because of this, there will be even more free rubles on the market, which means that their supply will increase, while the price will fall further.
At the same time, the Kremlin is quite satisfied with the weakening of the national currency, as it makes it easier to fill the budget with rubles, said the expert. If the authorities wanted to have a stronger exchange rate, the government could already take measures and tighten control over currency flows, but this is not happening.
Moreover, the authorities are consistently reducing the requirement for repatriation of foreign currency earnings of exporters, introduced by the President of the Russian Federation in October 2023. Initially they were obliged to sell 90% of earned foreign money, but then this figure was reduced to 50%, and from October 19 - to 25%.
At the same time, the fall of the ruble provokes the acceleration of inflation in the country, accelerating the prices of imported goods and services, said Vladimir Chernov. Inflationary pressure in Russia is already increasing, so the Central Bank may have to raise the rate to 23-25% at the meeting on December 20. This may lead to an additional slowdown in GDP growth and cooling of the country's economy.
The Mosbirji index will continue to move in the range of 2420-2800 points until the end of the year, we believe in "Tsifra Broker". Market rebound is possible not earlier than January 20, after the inauguration of Donald Trump, expects Andrei Barkhota.
