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Friday, December 9, 2016

The ruble will freeze for three years at the request of the United States


“The ruble will keep up to the election, and then his hurl to formally implement the budget” — was the leitmotif of economic forecasts in August and early September. But elections were held, and “wooden” feeling better and better. Not only not falling, but even strengthened. For example, on Wednesday, another 46 cents against the dollar. Even the American Agency Bloomberg in the same environment reported that in the next three years, the ruble will be consistently high, as the Russian monetary authorities have the mechanisms and the political will. Note: this post came on a day when the U.S. Federal reserve planned to announce whether it will raise rates. The positive decision of this question will reduce the price of oil. But despite that, there, behind ocean, in our currency, sure. What domestic economists — they said “MK”.


photo: Gennady Cherkasov

According to Bloomberg, in the preparation of the three-year budget for 2017-2019 years, the Government of Russia proceeds from the stability of the ruble. In fact, the actions of the government and the Central Bank this stability depends. The average exchange rate, according to the us Agency, in this triennium will be held in the range from 64 to 65 rubles to the dollar, even under condition of reduction of prices on oil to $40 per barrel. This does not exclude the weakening of the ruble to 67-68 rubles by the end of 2016, and further strengthening to 62-63 per dollar by 2019. This forecast is based on growing confidence that the Russian monetary system has experienced a shock from the transition to a freely floating ruble exchange rate (when the Russian currency collapsed to the rate of 78 roubles per dollar), and the economy has adapted to the reduction of hydrocarbons and Western sanctions.

Pavel KOZHEVNIKOV, financial expert, Director General of “Parsa company Group”: “Indeed, many analysts predicted a significant weakening of the ruble after the parliamentary elections, but at the moment this has not happened. On the contrary, the ruble strengthened, despite the continuing fall of oil. The correlation between the oil price and the ruble dropped to 0.56. But do not rejoice in the near future the ruble will catch up with the dynamics of oil, as excessive consolidation is not beneficial to the Government of the Russian Federation taking into account all major problems and holes in the budget. At the moment the price of the barrel in rubles is minimum in June and equals 3006 rubles, while the budget includes the price of 3200 rubles per barrel. But since even at these prices, the budget was planned with a deficit of 3%, the difference will be priced in by the market, if oil prices will not go up.

And another factor. In December ahead of the large payments on the external debt of Russia, which, with interest, will amount to 17 billion dollars. This is a substantial sum, which of course will affect the national currency. My prediction for the end of the year 69 to 71 rubles to the dollar.”

Nikita MASLENNIKOV, a senior expert of the Institute of contemporary development: “I do not believe in the forecast that the Russian monetary authorities will weaken the ruble deliberately. Deficit financing of the Treasury before the end of the year will go through the budget issue as a result of the expenditure of the reserve Fund. And this is a neutral impact on the exchange rate. So it will depend more on external factors: oil prices, interest of international investors to our markets. So I think that before the end of the year the ruble will weaken, maybe up to 67 rubles per dollar. But it will depend on the circumstances, which we can not influence. And further, if in the middle of next year will not happen upheavals of the world economy, the Central Bank has enough instruments in order to maintain a steady course. Drop the ruble, he does not intend. And maybe do the ruble will strengthen in the future”.

Yevgeny Gontmakher, Deputy Director of the Institute of world economy and international relations Russian Academy of Sciences: “the Forecast that the dollar will be worth 65 rubles for three years, naive. For such period to give an accurate in numerical terms, the forecast is simply impossible. It seems to me that the ruble is all this time will not grow, but will weaken. But I hope to weaken it will continue very slowly, smoothly and under control. Such failures, as in 2014, when a national currency collapses twice in a short period of time, I do not expect. Slow weakening of the national currency would be good for the economy had a beneficial effect on non-raw material exports, would facilitate the implementation of the budget. The main thing is to avoid sharp jerks, with both sides”.

Andrei NECHAYEV, former economy Minister of Russia: “I see no reason to rely on the stability of the exchange rate, but I do not believe in predictions that the Central Bank artificially and for no reason rush down the ruble. It depends on less than the price of oil. If you call me, the price of oil, which will happen in a year, I’m forty seconds give a forecast of the course”.

Nikita KRICHEVSKY, doctor of economic Sciences: “Forecasts that the ruble will be stable for three years in a row, Troll our economy and aim to put pressure on Pro-Western part of the Russian government. We are trying to impose the idea that artificially inflated the exchange rate of the ruble is a boon for the Russian economy. Actually it is good only for foreign speculators. To the next three years could come to us at a fixed rate and the same way out, while earning significantly more compared to Western instruments. Today the yields on Western government bonds — tenths of a percent, and we have 10% and above. As it was in the first half of the century when, for unknown reasons, from the point of view of economy the ruble for the past five years has been strengthened. Allegedly because the country has come a lot of currency. So what? All of this currency flew back just for one quarter. Someone fabulously rich. This was largely helped by the Central Bank, first Deputy Chairman of which was Mr. speaker. Need to develop its economy, not to help foreign speculators. If the rate is not adjusted artificially, its to predict a year in advance is absolutely impossible, because nobody has yet been able to predict the price of oil for such a long time”.

Sanctions . Chronicle of events
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