Ruble appreciates support – Kommersant FM

The ruble has experienced the strongest strengthening since the beginning of the month. It coincided with the Eastern Economic Forum. In two days, the dollar and euro lost almost 3 rubles. This happened against the backdrop of government statements made in Vladivostok. On September 12, Vladimir Putin noted that, in his opinion, the volatility of the national currency cannot be called an insurmountable problem or difficulty. And presidential aide Maxim Oreshkin promised back on September 11 that the peak of the ruble’s weakening had passed. The Ministry of Economic Development, in turn, shared plans to stabilize the exchange rate. And quotes reacted positively to these statements. How long will the effects of verbal interventions last? Ivan Khorushevsky sorted it out.

After the authorities and the regulator managed to contain the weakening of the ruble in the second half of August, they repeatedly tried to consolidate their success with their statements. The media wrote about plans to tighten capital controls, and the Central Bank has repeatedly announced a possible increase in the key rate. But if this news helped the national currency to strengthen, it was only for a few days.

The Eastern Economic Forum has become a platform for new verbal interventions. But the chief economist of the consulting company PF-Capital, Evgeniy Nadorshin, also does not consider them effective. The strengthening of the ruble is the merit of the Central Bank, which will begin selling 20 billion rubles worth of yuan. per day, says Kommersant FM’s interlocutor:

“The Central Bank promised very specific actions – participation in interventions in the foreign exchange market. And in my understanding, the first reaction is connected precisely with this promise. This is a pretty good amount of intervention, which for the current market may well shift the balance and push the ruble to strengthen.”

Officials do not want to put up with a weak ruble. The Ministry of Economic Development promised to return to the range of 70-80 rubles. for a dollar. How? Not specified. Bloomberg Economics Russia economist Alexander Isakov analyzed the tools available to the authorities:

“The two most effective measures to stabilize the exchange rate and strengthen it are a tighter budget policy and higher ruble rates.

Of the 25% depreciation from March to early September, half was due to insufficiently high ruble rates. We simply didn’t have any bonus for saving money in national currency.”

The next increase in the key rate, according to economists, will further support the ruble. This is the decision the Central Bank should make, according to the majority of economists surveyed by the media.

But other forecasts were made at the Eastern Economic Forum. The head of Sberbank German Gref and VTB President Andrei Kostin did not see the need to tighten monetary policy. However, the Central Bank may have its own view, says Digital Broker analyst Daniil Bolotskikh:

“In the first week of September, inflation jumped from 0.03% to 0.11%. Based on this, we conclude that at the next meeting the Bank of Russia will nevertheless raise the rate by 1 percentage point. Because, as the Central Bank itself previously stated, the impact of changes in the key rate affects the economy only after three to six quarters, and here it is necessary to act proactively.”

To be sure, Andrei Kostin suggested that the authorities also tighten currency controls by introducing limits on ruble transfers abroad. German Gref unexpectedly supported his colleague, and the Central Bank confirmed that they were already discussing the idea. Economist Nikolai Korzhenevsky is not sure that this is a good solution:

“If you, for example, show that you are ready to introduce serious restrictions on the movement of capital, large investors and businesses will remember this for a long time. If you need to cancel them six months later, there won’t be the same trust, the commitment to any type of policy.

Always taking long-term measures in response to short-term fluctuations is not a good idea.”

Despite all the statements of the participants of the Eastern Economic Forum, the market still continues to remain volatile. For example, on September 12, the dollar fell to 92 rubles at the beginning of trading, and at closing it rose in price again to 94 rubles. So the stabilization of the national currency is still happening more in words than in deeds. On the morning of September 13, the ruble fell by 1.5% on the Moscow Exchange. The dollar is valued at 96.16 rubles.

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