Jun 8, 2022
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The dollar exchange rate at 45 is a matter of time. Like 85. The ruble is waiting for a rollercoaster

The dollar exchange rate at 45 is a matter of time.  Like 85. The ruble is waiting for a rollercoaster


The exchange rate of the ruble began to strengthen again, although in recent weeks it has already felt quite confident. On June 6, the dollar on the Moscow Exchange was trading at 60.82, the euro – 64.51. At the same time, many analysts do not exclude that this week the dollar may drop to 57 rubles, even despite the upcoming meeting of the Bank of Russia on June 10, at which the key rate may be lowered again.

Last week, the Central Bank published a rather optimistic consensus forecast of economists. If in April the respondents expected a fall in GDP by 9% by the end of the year, now – by 7%, it is also assumed that inflation will be at the level of 17% instead of 22%, and the dollar will cost an average of 75 rubles, although a month ago it was said about the 85th. It is possible that soon the forecast will be revised downward again, at least, many representatives of the banking and stock exchange sector believe that the ruble will be strong at least all summer.

“Oil prices are quite high. Yes, there is a negative news background with embargo risks, but the foreign exchange market did not particularly react to this. The movement of the exchange rate is determined by the ratio of supply and demand. Apparently, import volumes remain low. According to my estimates, import volumes fell by 50% in April, while export earnings are still high. We need to prepare for the fact that in the coming weeks the rate may return to the range of 55-60 rubles, ”said the chief economist of Alfa-Bank Natalya Orlova.

Some analysts even name figures that seem to have long been left in the past – 45 rubles per dollar. Experts interviewed by “SP” believe that there will still be no such radical strengthening of the ruble exchange rate, and agree that the lower limit of the national currency is somewhere around 56-57 per dollar. Such figures were called by currency analysts Sergey Drozdov I Alexander Egorovreferring to the level of support for the ruble in the past and a balance that is comfortable for exporters and importers.

However, as SP explained Director of the Higher School of Finance of the Russian Economic University named after G. In Plekhanov Konstantin Ordovalready in the fall, the situation with the exchange rate will change, and it will return to more familiar values ​​for us – 70-80 per dollar. The most paradoxical thing is that, according to the expert, the current strengthening of the ruble will not lead to the same strong reduction in inflation. It turns out that the ruble can be arbitrarily strong, but we still won’t buy imported goods at the old prices.

– On the one hand, the strengthening of the ruble leads to a relative control over inflation, on the other hand, the pluses end there. The fact is that now we cannot use the strong ruble to purchase equipment, building materials, and foreign labor from abroad.

We have not seen such a radical strengthening of the ruble for a long time. It is connected with political events that led to the blocking and restrictions of our transactions in dollars and euros, and sanctions against banks. Uncertainty and trade restrictions have led to a sharp drop in imports to Russia. As a result, we do not spend foreign exchange earnings, which come to us from more than comfortable market prices for oil, gas and other raw materials of our exports. For us, the market situation is more than favorable, even despite the discounts that we are forced to give on oil, and it leads to a very good budget surplus.

The question arises how long we can do without imports and when we will replace them. Now the story of parallel imports is developing, the share of savings of companies in yuan and alternative currencies is increasing. It is not yet possible to understand how this will affect the ruble exchange rate, because the yuan/dollar and yuan/euro cross rates must still be maintained. If we see the exchange rate of the ruble at 56 per dollar, then it should strengthen against the yuan, and there are fewer prerequisites for this. But in such a strange paradigm, our foreign exchange market exists today.

“SP”: – What will be the exchange rate of the ruble this summer, can it really strengthen to 45 per dollar?

– Probably, the ruble will continue to strengthen, firstly, until we normalize export-import operations with friendly countries that are ready to continue commercial activities with us, and, secondly, until internal and external restrictions are removed on our foreign exchange market. Until the free circulation of currency, payment for trade operations, transactions and other things is returned, we will not have an equilibrium exchange rate of the ruble.

The Central Bank announced that it is not worth waiting until September for the liberalization of relations in the foreign exchange market. Therefore, before September, we can really go up to the level of 45 rubles per dollar, but we can also go up to 75. It would seem that the range is colossal, but this is due to the fact that even having conditional dollars and euros, we cannot physically spend them. The ruble exchange rate ceases to have a sense balancing economic relations between countries. When these relations are fully implemented again, then we will be able to talk about a market, fair and justified ruble exchange rate. And, depending on the economy and inflation, it will most likely be in the usual range of 75-85 rubles per dollar.

Our financial authorities do not rule out that oil prices will fall by the end of the year. Therefore, although for us the strengthening of the ruble, as an anti-inflationary measure, seems to be pleasant and necessary, in the medium term of six months we have a clear understanding that the predictability of the exchange rate is much more beneficial than its volatility. The ruble exchange rate from 70 to 90 per dollar is comfortable both for the economy as a whole, and for the budget, and for commercial companies, which will clearly understand how their costs and incomes add up.

“SP”: – How long will it be possible to maintain such a strong ruble exchange rate?

– I expect that in the near future the course will be unpredictable. We see that the Central Bank does not seek to play along with the strengthening of the ruble, and it has few tools for this. And already in September and beyond, against the backdrop of lower restrictions, the exchange rate is expected to return closer to 80+ rubles per dollar.

At the same time, it is not clear what will happen to the euro. The European economy is showing signs of stagnation, while the American economy is showing signs of stagflation. All this can lead to the fact that the world economy slows down too sharply, and the stock markets begin to fall. This will reduce confidence in the dollar and the euro, while the ruble already seems to reflect the economic situation that is developing in Russia. Therefore, against the background of this negative dynamics in the West, the ruble may remain in the range of 75-85.

But, I repeat, the situation is unpredictable, and you can return to this conversation at least every month, especially against the backdrop of how rapidly the Central Bank is lowering the key rate. Previously, this measure was supposed to affect speculators, but now we have eliminated all speculators from our market, which means that a further reduction in the rate will not affect the weakening of the ruble, paradoxically.

“SP”: – Well, the ruble will be strong for at least three months, is it worth waiting for a decrease in inflation and prices for imported goods? What are the advantages for us from such a strong ruble?

– The “pass-through effect” of the exchange rate, well, domestic prices does not work in the conditions of the economic crisis, and we are in one of its stages, this must be recognized. If earlier it was believed that the strengthening of the ruble could lead to a decrease in inflation or even to deflation, today the strengthening of the ruble occurs against the backdrop of rising prices. It is important to understand that other factors have come to the fore in pricing – this is the break in supply chains, which occurred back in 2020 due to the pandemic and did not recover due to the political situation. This gives rise to deficits, imbalances in the markets, which lead to higher prices, although the ruble has strengthened against all currencies.

The second point is the decline in imports. It appears to be shrinking by more than 30%, and the “pass-through effect” is mainly affecting imports. And since there are fewer imports, the effect is not so noticeable. As a result, the course is no longer the main determining factor in price dynamics. Although, it seems to me, the return of the exchange rate to the number of dominant factors in inflationary processes is a matter of time.

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