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Tuesday, October 25, 2016

The collapse will come in September: the ruble will not survive the elections to the state Duma

Analysts of Russian banks predicted the weakening of the ruble. Key risks for “wooden” experts say the decline in oil prices and the increase in budgetary expenditures that during the election period can be a trigger for inflation expectations. As a result, Russian currency is able to lose up to 15%. In this scenario, the dollar will reach 73-74 RUB and Euro — RUB 82 Chief researcher, Institute of Economics, RAS Nikita Grecheskiy went further and pointed out the exact date of the beginning of this process: after 18 September, when elections to the state Duma.

photo: Gennady Cherkasov

A number of respondents “MK” experts shares these concerns. And the main conclusion boils down to the fact that the current exchange rate most favorable for the population: if you buy the currency now. And better dollars, because of the precarious situation of the European Union Euro may also see problems.

Nikita Isaev, the Director of the Institute of contemporary Economics:

“The current information agenda, indeed, entirely define the upcoming elections to the state Duma. If we allow the weakening of the national currency now, it can hit the image of the ruling party. After the ruble is devalued. Most likely, it will happen in October. Exactly, because in the fourth quarter, it will be necessary to impose the Federal budget for 2017. Meanwhile, to cover the budget deficit

spent accumulation Reserve Fund, which supported the ruble afloat. The population should be prepared for the fact that the fall of the ruble will begin to fall in price relative to Dolly and the Euro. The current exchange rate of the national currency, the most high, so if you want to buy something from a multi-currency basket, do so now. It is better to focus on the dollar, with the Euro may “squander” on the background of the existing problems of the European Union. By year-end, according to my forecasts, if oil drops to the level of $ 35 per barrel, the dollar may rise to 80-85 rubles, while the Euro strengthened to 85-90 rubles”.

Artem Deev, head of the analytical Department AMarkets:

“The main factor that affects the exchange rate, are oil prices. Now we are seeing a very negative trend in commodity markets, it is therefore logical that the Russian currency is under pressure and can significantly be corrected in the short term. But to talk about the level of 70 rubles per dollar, we think, is premature because certainty about the medium-term dynamics in the oil market. At current prices, weakening perhaps to the level of 67-68 rubles per dollar. But if oil prices will approach $ 45 per barrel, the likelihood of achieving a rate of 70 rubles per dollar significantly increases.

Pavel Medvedev, the financial Ombudsman:

“I would not be too categorical to predict the fate of the ruble, especially since the Russian currency has a strong dependence on external events, similar to, for example, the referendum on the British exit from the European Union. Brexit we’re definitely going to go sideways, but the effect of it, fortunately, will not be long-term. Also, I believe, if the weakening of the ruble in the short term will be strong enough, the Russian authorities will find a way to correct the situation, not to bring her to the point of absurdity”.

Rising prices and a falling ruble. Chronicle of events

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