More recently, experts gave quite optimistic forecasts of the ruble exchange rate for 2021, not only domestic but also foreign ones. The Ministry of Economic Development forecasted the average annual dollar exchange rate this year at 72.4 rubles. Bank of America believed that the average annual rate would be 70 rubles, and by the end of the year it would drop to 68. Investors surveyed at the end of 2020 by Bloomberg even called the “Russian” one of the most promising currencies of 2021.
However, at the end of January, the ruble lost a significant part of its gains and dropped to 75.5 against the dollar and 91.61 against the euro. Moreover, as economists believe, this is not the limit. The reasons for the fall, as before the US presidential elections last year, are mainly political. The market expects that after the arrival Joe Biden to power, the sanctions pressure on Russia will increase. If at first it seemed that the new American president would be more focused on domestic affairs, his harsh statements that he would not avoid problematic issues in relations with Moscow added pessimism about the ruble.
The overall economic condition of the planet also negatively affects the prospects for the Russian currency. The vaccination that has begun, it seems, should have put an end to the coronavirus pandemic, but when exactly the fracture will occur is unknown, and the current results are not encouraging.
The ruble now does not have significant recovery potential and can only rely on the United States. Stock analysts believe that the pressure in the coming days may ease under the influence of the rhetoric of the Fed, whose meeting ends on Wednesday. If the regulator confirms its adherence to an ultra-soft monetary policy, and the likelihood of such a scenario is very high, the dollar will go into retreat. However, since the dovish rhetoric of the Central Bank is already largely taken into account in prices, one should hardly expect a significant reaction from risky assets.
As a result, according to the experts interviewed by the “SP”, the reasons for hopes for the best have diminished for the ruble, and now, instead of waiting for 68-72 per dollar, we can only hope that we will not see the rate of 90, although such a possibility cannot be ruled out …
FxPro Lead Analyst Alexander Kuptsikevich explained to “SP” that in addition to sanctions, there are other factors of pressure on the ruble, and if they play, “Russian” will very quickly be at the level of 80 per dollar.
– Since the end of last week, the ruble has been under pressure from sanctions risks. Investors fear that the West will impose new sanctions to restrict exports, as well as put pressure on the country’s financial system. But these are not the only factors of pressure on the ruble. After all, fears of difficulties with the restoration of global energy demand are accumulating in the background: in recent weeks we have seen very weak macroeconomic data from the USA and Europe, while in China consumer demand remains subdued. As a result, the oil price stalled.
Another point is short-term market factors. Markets have experienced a dizzying rally since early November, with the ruble hitting a ceiling of 72 per dollar. The stoppage of this movement triggered a short-term spike to close the investment idea of the last three months (buying emerging market assets).
“SP”: – What are the prospects for the ruble?
– The combination of these three factors stretched the pressure on the ruble, sending it to monthly lows against the dollar and the euro. In December, we saw the same growth near the current levels, which depleted on the way to 76. If this level holds this time too, the USDRUB reversal to the decline may be quick and decisive.
Exit above 76 per dollar and 92 per euro will signal more long-term intentions of the ruble sellers. In this case, within two weeks, the dollar may be at 80, and the euro – in the area of 93.0−94.0.
Roman Zhatkin, Head of the Client Department at Vostochnye Vorota believes that in the medium term, the Russian currency may well collapse more – up to 90 rubles per dollar, but this will not happen tomorrow.
– Sanctions risks in our country will only increase. Moreover, with the coming to power in the United States of the Democrats headed by Biden. This does not mean that the ruble will collapse tomorrow, but the weakening of the ruble will occur periodically, and at some point we will see a new range. In a normal mode, it may take several years, but the market always has the opportunity to catch a “black swan”, which will accelerate this movement, will work as a driver.
Based on past experience, the dollar / ruble movement range is usually 10 rubles. If earlier we traded in the range of 60-70 rubles, now it is obvious to everyone that we have moved to a new range – 70-80. The next will be 80-90 rubles per dollar.
But again, this is not a prospect of several days. Rising oil prices, as well as the positive balance of the Central Bank, will prevent panic in the foreign exchange market today.
Chief Analyst at Promsvyazbank Roman Zvarych believes that the fall of the ruble in the near future will not be so strong, but it may reach 77.5 per dollar.
– Today, the ruble is partially recouping losses incurred at the end of last week. Together with the dollar, it is traded in the region of 75.2 rubles. In our opinion, the ruble has the opportunity to consolidate in the range of 75-77.5 rubles. per unit of American currency. The reason for this may be some deterioration in the situation with oil prices. The current levels do not quite correspond to the fundamental indicators of the market, and we expect a retreat of Brent crude in the range of $ 50-55 per barrel. In this regard, the ruble may come under pressure, and the ruble may gain a foothold in the range I have named.
If we additionally receive an increase in investor fears about the dynamics of the global economy due to the coronavirus, this may put additional pressure on the Russian currency, as it will lead to a decrease in investor interest in the currencies of developing countries. As a result, testing of the 77.5 mark per dollar is not ruled out.