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Jan 14, 2022
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“Resetting deposits”, devaluation-2022: The executioner has already raised an ax over the ruble

Photo: Stanislav Krasilnikov/TASS

Nowadays, everyone has the right to their personal moment of fame or just hype. Including the charming economic observer Alexandra Bayazitova. She recently stated that in the coming year, the devaluation of the ruble and the “zeroing of deposits” are possible, when the money seems to remain the same, but nothing can be bought with them, from the word at all.

Talking about herself, Alexandra claims that she is an “honorary agent of the Ryazan region”, a “financial muse” in some “Infernal grandmas”, and, finally, “a taster of the blood of scoundrels in the Bloody regime.” That is, one can understand that this respected expert has everything in perfect order with humor. However, in every joke, as you know, there is a share of a joke. Perhaps, in fact, if our authorities begin to talk about the reliability of the ruble, it is worth rushing to buy foreign currency?

According to Head of the “Finance and Economics” Department of the Institute of Contemporary Development, Doctor of Economics Nikita Maslennikov at the beginning of any year, such “financial forecasts” traditionally appear:

“Now there is no reason for anything like that. Let’s proceed from the fact that the geopolitical situation will receive a certain detente. Now the ruble is under pressure from events in Kazakhstan and Ukraine, as well as sluggish negotiations through NATO and absolutely inaccurate statements by our Foreign Ministry officials that there are no positive prospects for these negotiations with the Americans. This has already collapsed the Russian currency by one and a half rubles against the dollar, and the process continues.

It is necessary to continue the line of detente, and our Foreign Ministry managers and leaders must be extremely careful in their statements, because this is immediately reflected in the exchange rate. Maximum restraint is needed, and maybe even additional financial education. Because sweeping expressions damage the national economy.

However, these phenomena are transitory. A normal, classic forecast is that the ruble remains in the range of 74-76 per dollar until March. It will then be followed by a slight weakening, because the US Federal Reserve will begin to raise its base rate.

As for the “zeroing of deposits” – it is generally difficult to imagine. On the contrary, we observe absolutely obvious tendencies towards the growth of deposit rates. This is already stressing many financial players, because before they switched from deposits to other financial instruments, in particular, to federal loan bonds, corporate bonds, shareholdings.

Now this trend, firstly, has slowed down, and secondly, we are seeing an increase in the volume of household deposits in deposit accounts.

I have no idea what “zeroing deposits” is in the current situation, because a large-scale devaluation – a depreciation of the national currency against hard currencies – is not visible. The State Bank and the Ministry of Finance of Russia have enough tools to intervene in pricing, if necessary. But for the economy, it is counterproductive.

After all, if you sharply drop the exchange rate, then inflation will recover in two or three quarters, which you reduced during the year by raising the interest rate. Therefore, it is hardly possible at all from the point of view of the financial authorities.

Nevertheless, the situation is quite complicated, the ruble exchange rate is under pressure from geopolitical risks. Hence such a paradox: oil is under $85 per barrel, and the dollar is at 76 rubles, which is a sign of an abnormal situation.

“SP”: – Now you can store savings in several currencies. For currency speculation has not been shot for a long time. On the ruble, the world did not converge like a wedge: if you want in euros, if you want in dollars, but if you want in yuan, keep your savings – if they, of course, are.

– In anything, but still the ruble has a clear enough prospect. Because inflation will decrease, and by the end of the year it will be about 5%. As of January 10, it was 8.6% in annual terms, but there are prospects for a decline. The first quarter will still be quite difficult, and by the middle of the year we will already begin to feel the reversal of the emerging trend towards inflationary pressure, towards its weakening …

Of course, chickens are counted in the fall, as are currency baskets with golden eggs, which, as you know, should be stored in different places. 2022 has just begun, what will happen by summer, autumn or next winter is hard to say.

But we have already experienced various kinds of shocks: in the late eighties, early nineties, which resulted in 1991 in the seizure of large banknotes from the population during the reform Valentina Pavlova, and in the late nineties, when in 1998 ruble deposits, if not updated, then greatly decreased. A technical default was declared on the main types of government debt, and the word “kinder surprise” appeared to refer to the then prime minister Sergei Kiriyenko.

Russia may once again experience a currency crisis similar in scale to the events of 2014, when the Central Bank of Russia was forced to raise its key rate to 17% per annum due to high inflation. The dollar in those days was first estimated at 30 rubles, and by the end it reached about 60. Is there anything similar today? No, unless a war breaks out in Ukraine, in which Russia is immediately blamed. Although inflation has skyrocketed. The regulator may be tempted to keep raising the refinancing rate.

Now we have a general, global economic crisis in the yard, which since the beginning of 2020, according to some estimates, has cut off about 20% of its “pre-Covid” value from the ruble. But the same can be said about all other currencies: the dollar, the euro, and the yuan with the pound.

Expert of the Academy of Financial and Investment Management Alexey Krichevsky believes that if you believe the words of every pseudo-analyst who is published in the media, then it is easier to go to the village and turn off all means of communication so that news from the big world does not disturb the mind:

– Firstly, it is completely incomprehensible what is meant by “zeroing money”. If we are talking about inflationary and devaluation processes, then they started back in 2020, and before that – in 2014, so it was worth talking about them a little earlier.

Secondly, the Central Bank will always advocate for citizens to keep their savings in rubles, regardless of the economic period. It is guaranteed that you will never hear from the head of any central bank in the world the words that you do not need to keep money in the national currency, it is better to keep it in dollars, euros, francs etc. This is a priori strange, especially considering that the official works for the state and directly affects its economy.

There is a very simple panacea for devaluation and partial inflation – a diversified financial cushion and the purchase of bonds and Eurobonds of large companies with real profit. If only it didn’t work out like Rosnano did, when the corporation used new debts to service the old ones and pay salaries.

Thirdly, there is nothing new in the devaluation, which may take place already in the first half of this year, everything is gradually moving towards this. The external background is becoming more and more tense, the ruble is no longer affected by very high energy prices, investors are afraid of war and sanctions and are dumping the Russian national debt. And diversification of savings can help to get through it again. It is definitely necessary to keep a certain amount of money in rubles, because this is the country’s currency and there will be no need to resolve the issue of conversion. But it should not exceed 50% of the total pillow …

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