Jan 25, 2021
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Why can the ruble fall in price again?

For the first time since March 2020, the Ministry of Finance will purchase foreign currency for 106.3 billion rubles. “I think the department wants to show that, despite difficult times, we continue to replenish our gold and foreign exchange reserves. Returning to the ancestral rails of the budget rule, says Alexander Abramov, Head of the Laboratory for Analysis of Institutions and Financial Markets, RANEPA. – And the budgetary rule assumes that as soon as the price of Urals oil rises above $ 43.3 per barrel and additional oil and gas revenues appear, the Ministry of Finance starts buying foreign currency. Now the oil price is quite comfortable, in the region of $ 50–54, so the budget rule is working again. But how appropriate is it? Of course, this is a big risk for the ruble exchange rate. Only the Central Bank managed to convince foreign investors and citizens that stabilization of the national currency awaits us – and here again we got the opposite trend. The ruble will fall in price with a high degree of probability ”.

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