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220 rubles per dollar is critical for Russia

The ruble continues to roll down. However, the Ministry of economic development not lose their presence of mind. On 11 September the head of Department Maxim Oreshkin on the sidelines of the Eastern economic forum has stated that it will not revise the forecast of the ruble to the end of the year, which now stands at 63,9 per dollar (now the rate is around 70 rubles/dollar. and the Euro about 80 rubles). The Minister said that in the six months to a year, the Russian national currency stabiliziruemost at the level of 63-64 per dollar.

But that’s not all. Later, the Minister in an interview said that now is the best time to sell dollars and buy rubles, because soon the rate will reach a peak, and then quickly set back to previous values.

“It all translates to the values that we see, but as the situation reaches a certain peak and then begin to unfold, we will see the same rapid movement and back,” said Oreshkin. The current instability of the ruble, the Minister explained the “nervous condition in the market.”

“SP” wrote that the ruble really should be higher and the Central Bank and other financial bodies have the tools to stabilize the situation. However, do not use them, and the ruble continues to become cheaper. Experts attributed this to the actions of speculators and the expectation of sanctions (in November, can force to join another package for the “case Skrypalia”). Some analysts do not exclude that the financial authorities are deliberately not in a hurry to save the ruble, as the cheaper currency means a higher income budget from the sale of oil and gas.

In such conditions the optimistic forecast of the Minister caused surprise, most respondents “SP” analysts. And although their views about the future of the ruble is different from cautiously optimistic to very pessimistic, to run to sell dollars and buy rubles advises not one of them.

Vice-President of the Guild of financial analysts and risk managers Bogdan Zvarich believes that a specific resource for the strengthening of the rouble has.

Apparently, Oreshkin suggests that the Central Bank will take measures to stabilize the exchange rate. In the current situation, 63-64 rate of the ruble to the dollar seems unlikely. But the Central Bank has tools that will strengthen the ruble against the dollar and the Euro.

First, until the end of September, the Central Bank buys currency on the open market. In the coming weeks should hold the ruble, as now, the exporters are preparing for a tax period. They sell the currency to create a ruble-denominated reserves, which in the future will go to pay taxes.

Secondly, it is worth remembering that these are high oil prices, which should support the national currency. The main negative factor for the ruble can be called fears the possibility of tightening sanctions. They, in particular, can affect our national debt, negatively affecting investor sentiment towards the ruble. In addition, we see the weakening of currencies in other emerging markets, and it can not touch the ruble.

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However, the price of oil and the tools of the controller can stabilize the currency market. In the current environment, the rise in the key rate is unlikely. But in the case of shortage of currency in the banking sector, the Central Bank may use instruments such as currency repo, to satisfy the demand for currency to satisfy its foreign currency liquidity, which will also support the ruble. Do not rule out that the rejection of purchases of foreign currency to the Ministry of Finance on the open market can be extended after the end of September.

Professor of the Department “Finance, monetary circulation and credit” of the faculty of Finance and banking, Ranepa Yury Udencov believes that these measures alone controller is not enough, and in the very worst scenarios, and that sanctions against Russian banks and lock dollar accounts, we can see the collapse of the ruble below 200 per dollar.

— I think Maxim Oreshkin in his forecast wrong. To predict now we have to wait for the meeting of the Central Bank on Friday and see what happens with the key rate will increase it will decrease or remain at current levels. But last week, Central Bank head Elvira Nabiullina practically admitted that in the conditions of uncertainty in financial markets and the behavior of the U.S. Congress, the regulator can not be responsible for the ruble.

In these circumstances, I would have noticed the strange behavior of the Ministry of Finance. It still ensures the stability of budget that buys dollars, though not on the open market. For me it is inexplicable. It turns out, the Central Bank does one thing, Ministry is another, and the Finance Ministry — the third. In previous years, was still the General line of economic departments. Now it is not visible.

In addition, I would like to mention inefficient policy of the Ministry of economic development. This Ministry has turned into a research Institute, which does not correspond to the current policy. And the words of Maxim Oreshkin of the ruble the best proof. The Minister constantly makes statements that excite the market, living expectations. . Acts without regard to the market, as if we still exist, planning Commission. It seems to me that this Department needs serious changes.

“SP”: — so you think that to sell dollars and buy rubles, as advised by the Minister, we should do it now?

— I remind you that when Maxim Oreshkin only assumed the post on one of the first questions about what to invest money, he replied: “In dollars”. So I shouldn’t present it to the Council. It can mislead both the population and the authorities.

“SP”: — it is Clear that predicting anything is difficult right now, but if you do not agree with the Minister that, in your opinion, will happen to the ruble in the end of the year?

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We, economists, evil joke that if 22 Nov will come into effect U.S. sanctions in the strict form, which prohibits transactions in dollars and other Russian state banks and blocking their accounts, then the course is available and at 220 rubles per dollar. Stress is not mandatory, but possible. If such a scenario materializes, Russia’s economy may not survive.

I calculated that since 70% of world trade is conducted in dollars, if we will go through currencies, the ruble will need to depreciate approximately three times. We, of course, powerful country, and all will survive, but 220 rubles per dollar is critical.

“SP”: — And if not to consider such a critical scenario?

— You know, it’s not the most critical scenario. The worst thing would be if after the United States turn away from us, first Europe and then Asia. In this case, we would be like Iran or even Iraq. Fortunately, while we are talking only about economic “trolling” from the United States. But if it will join the others… No, we will survive, we have a rich country. But it will not be easy. And, most importantly, it turns out that we are with its approach somehow does not fit into globalization. Let’s see how events will develop. Have to wait two months before any clarity.

Associate Professor of stock markets and financial engineering of Ranhigs Sergei hestanov believes that it is not necessary to go into extremes and give as too optimistic and apocalyptic predictions.

— Statement responsible. can neither confirm nor deny responsibly. On the ruble is most strongly influenced by purely psychological factors. If it were not processes associated with the sanctions, we would see the ruble in the area of 58-60 per dollar. At current oil prices, our currency could strengthen to 55.

What we are seeing now, is the anticipation of sanctions. It is not clear what they will be in final form, but a just in case get rid of the ruble and ruble-denominated assets. Therefore, if we assume that the sanctions pressure continues, it looks pretty convincing course in 80 to 82 rubles per dollar.

This broad fork from 55 rubles to the dollar at an extremely optimistic scenario to 82 with very pessimistic, says that, unfortunately, is not the economy now determines the exchange rate, and politics. The psychology of market participants can change very quickly. There are too many factors, of which exchange rate assessment, may have to reconsider.

“SP”: — That is to say with certainty about the exchange rate of the ruble 63-64 per dollar premature?

— I think so. Equally adventurous as to give optimistic forecasts and scare very pessimistic. The political factor is in principle difficult any predictions.

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