Record currency sales strengthened the “wooden” market until the New Year
Over the past month, the dollar exchange rate has dropped by about 10%: if in mid-October they gave almost a hundred for an “American”, now its stock quotes have fallen below 90 rubles. Financial analysts believe that the ruble will remain at this level until the New Year holidays, however, currency dynamics for next year continue to remain a big question. MK asked experts to give a forecast regarding the future exchange rate of the ruble.
Sergey Ramanninov, analyst at Markets Money Power:
“The main reason for the current strengthening of the ruble is the increase in exporters’ sales of their foreign currency earnings. After they were obliged in October to sell at least 90% of the cash proceeds from their foreign transactions, they significantly increased the volume of foreign currency sales: this figure, compared to September, more than doubled and reached the maximum annual levels – almost 823 billion rubles. And although this topic is constantly moving into the shadows, there are currently no other reasons that could have such a strong impact on the exchange value of the ruble on foreign exchange trading floors.
For the state, the current quotes can be considered satisfactory: the government has long argued that the level of 90 rubles per dollar is a budget-friendly target limit. Given current oil prices, a move below this level could have a negative impact on national treasury revenues. However, this course will not last long. On the eve of the presidential elections, scheduled for mid-March next year, one should not expect any special fluctuations in the exchange rate value of our national currency and an increase in the dollar exchange rate – up to 100 rubles or higher. It is difficult to predict further changes in currency dynamics.”
Artem Tuzov, director of the corporate finance department at IVA Partners:
“In recent months, strict government measures have been taken against exporters and non-residents. In particular, the institution of currency commissioners was recreated, whose task is to monitor sales of foreign currency earnings by exporters and control the volume of such transactions manually. In addition, foreign currency sales were taken under surveillance when non-residents leaving our country were selling their businesses. Taken together, such actions by financial departments made it possible to balance the sale and purchase of foreign currency, which contributed to the strengthening of the ruble exchange rate to fundamentally justified levels.
At the same time, it is easier for officials to balance the federal budget with a weak national currency, and the majority of our compatriots do not always rely on imported goods. Therefore, the currently observed increase in stock exchange quotations for “wood” will not be a serious “gift” either for the state or for ordinary people. However, the Russian currency has every chance of further strengthening: by the end of the year, we can predict that the dollar will fall to 75-80 rubles.”
Natalya Milchakova, leading analyst at Freedom Finance Global:
“The strengthening of the ruble is due to technical factors – the dollar exchange rate dropped throughout November and did not stay above the level of 90 rubles. In the second half of this month, the “American” risks reducing its values to 88 rubles, and then, if it does not stay at this level, the “green” will have the road open to falling to 85 rubles. The dollar is weakening because the cycle of interest rate hikes appears to be ending in the US. In Russia, the key rate of the Central Bank, on the contrary, is growing, and the cycle of its increase cannot be considered complete. The fall of the dollar is greatly influenced by mandatory requirements for exporters to sell foreign currency earnings, as well as a reduction in the Urals discount to Brent at simultaneous relatively high world oil prices. This also increases the revenue base of the Russian budget (European Brent quotes are about $80, and Urals is trading at $67-68).
At the end of each month, the ruble is supported by the tax period. However, new packages of sanctions against the domestic economy and high demand for imported goods are preventing a more significant strengthening of the Russian currency. There are no signs that the dollar this year will fall to the level of early 2023 – 70-72 rubles.
At the same time, even such a strengthening of the ruble, which we are seeing now – at least less than a “hundred” per dollar, is certainly a “gift” for the population; in this case, the real incomes of citizens in dollar equivalent depreciate at a slower pace.
At the same time, the current strengthening of the ruble cannot be considered as a “prize”: if the “wooden” one falls into an uncontrollable peak and falls uncontrollably, like the Turkish lira or the Argentine peso, then such a reversal will not be possible for either exporters, the population, or the state. will turn out to be profitable. In the end, the prestige of the national currency will suffer. In the context of the dedollarization of the domestic economy and the transfer of cross-border payments to national currencies, such maneuvers are not normal and discredit future trade relations. Let’s hope that the current monetary policy of the government’s financial bloc will allow our national currency not to leave the corridor of 85-93 rubles per dollar.”