Named a critical point for the Russian currency: how the “wooden” will survive the rebellion

Having exceeded the mark of 86 rubles, the dollar exchange rate will quickly reach 90

On the morning of Sunday, June 25, many bank exchange offices, which previously worked around the clock, were unavailable to visitors. The currency market took an obvious pause in order to recover from the heavy geopolitical news that tormented it the day before. And what will happen to the ruble now is not clear: Saturday’s crisis seems to have been resolved, but its long-term consequences for the financial market are not entirely clear.

On Saturday afternoon, June 24, at the peak of disturbing news from the south of the country, the exchange rate of the Russian currency not only got out of the normal mode, but showed some completely outrageous values ​​in exchange offices: in a number of places, cash dollars could be bought for only 100-105 rubles, euro – for 115-120 rubles. Banks seemed to compete with each other, who will raise the bar higher – just in case! By the evening, when the news background became positive, the ruble quickly got out of this dangerous state for itself, returning to the relatively calm levels of 88 per dollar and 97 per euro in exchange offices.

As for exchange trading, as you know, they are not held on weekends: at the close on Friday, June 23 (this was before the news of the rebellion), the dollar on the Moscow Exchange was trading at 84.7 rubles, the euro – 92.3. The exchange rates officially set by the Central Bank for the weekend and Monday were 84.07 and 91.49, respectively. As bank representatives assure, on June 24 there was neither an influx of customers, nor a rush demand for cash withdrawals. However, under any circumstances, regardless of the current market conditions, the question arises – what will happen to the rate further? It is already known that on Monday (announced in the capital as a day off) the Moscow Exchange will hold trading as usual. They will clear things up a lot.

“There is a widespread opinion that a sharp jump in the dollar against the ruble in exchange offices is of a psycho-emotional nature, that this is a spontaneous reaction of the market to negative, disturbing events,” says Nikita Maslennikov, a leading expert at the Center for Political Technologies. – In my opinion, the Central Bank is behind this decision: it could not have done without its tacit recommendations. The regulator was faced with the task of preventing an explosive demand for currency from the population, which would destabilize the overall financial situation. By raising the sales rates to an average of 90 and 100 for the dollar and euro, the largest banks presented the Central Bank with the desired result: no one rushed to buy currency at such a rate … It also helped that events unfolded on Saturday, when many city residents were in gardens and dachas…”.

What’s next? Based on internal logic, in the next two or three days the official rate will be kept in the corridor 84-85. Moreover, the tax period, which traditionally strengthens the ruble, will last until Tuesday (companies pay taxes in rubles, and the currency is thrown off). The decision of Saudi Arabia to reduce daily oil production by another 1 million barrels from July 1, which theoretically will whip up prices for raw materials, can also give some support to the Russian currency.

“But a lot will depend on the external information flow,” says Maslennikov. – Markets live with news, and various kinds of speculation and rumors only add to the nervousness, especially in combination with caustic comments from the media and experts. In the coming days, such remarks will certainly follow. The crisis provoked by the Wagner rebellion has not been finally resolved, it has only been put on pause. Uncertainty remains extremely high. Now this situational factor will unequivocally dominate even over fundamental ones, such as, for example, a significant deterioration in the trade and balance of payments. Let me remind you that the current account surplus in January-May 2023 decreased four times, according to the Central Bank, amounting to $22.8 billion against $123.8 billion a year ago.”

It is clear why on Sunday many exchange offices were closed: it was a solidarity move on the part of credit institutions seeking (especially on the eve of the expected exchange trading) to avoid mass panic and hype after the well-known events, says financial analyst Sergei Drozdov. As for the high exchange rates set the day before by the banks, the motive here is exactly the same – defensive. To all appearances, both the stock exchange and the official dollar rate will fluctuate around 85-86 rubles in the coming days. The critical point for the ruble is 86: if it is overcome, the rate will quickly roll back to 90 per dollar, and then further. To implement such a scenario, not only a very serious, but a long-term geopolitical shock is needed.