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Saturday, October 22, 2016

The expert commented on the record fall of the Euro: is it worth to buy the currency

The Euro continues to set records fall. For the first time since December, the European currency was worth less than 70 rubles. About why this decline is occurring, whether it is long term, and whether now the Russians to invest surplus rubles into foreign currency, “MK” asked economic expert, Director of the Institute of contemporary economies Nikita Isaev.

photo: morguefile.com

The depreciation of the Euro against the dollar is due to several reasons. The American economy is on the rise, it shows considerable stability, increasing production, in contrast to Europe, where it just falls, – said Isayev. – Moreover, in Europe there is a fairly significant deflation. It’s also impossible to ignore the problem of Pexit, which still continues to play a significant role in the strength of the foggy situation in terms of subsequent political decisions. All of these factors certainly influence the Euro.

If you say, how will this affect Russia, then, will remind, recently released the report of the Ministry of Finance of the Russian Federation for the first half of 2016. Proceeding from it it is clear that during this time were collected 43 percent of taxes from the planned 50, while oil and gas revenues we received 39 percent. In other words, it is clear that we significantly do not get enough of the money stock, and, as a consequence, no doubt the devaluation of the Russian ruble I have does not exist. Most likely, the devaluation will happen after the elections and formation of a new State Duma. I think that on this basis, it is necessary to consider pair Euro-dollar, as is evident relatively stable currency that does not depend on the problems occurring in Russia.

I have almost 100% confidence that the Euro will rise against the ruble. Russia’s budget is written and laid out on the basis of a 3 per cent budget deficit, now it has 4 per cent. And even potential privatization, which everyone is expecting, most likely will not save the Russian budget imbalance. In order to balance the budget, we will have to devalue the ruble, and he will be again to the extent with which we began this year to 80-85 rubles per dollar and 85 to 90 rubles per Euro.

Those who have the opportunity and have a RUB, it may be advisable to shift them into a multi-currency basket with the priority of the dollar, as the Euro is likely to continue to lose value. Perhaps there is a reason to buy the pound, which has now fallen to the lowest values on the background of Brickset, but will return to its average position.

Rising prices and a falling ruble. Chronicle of events

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