Ruble on a powerful word – Newspaper Kommersant No. 60 (7505) dated 04/07/2023

The dollar exchange rate at the auctions of the Moscow Exchange again renewed the annual maximum, having confidently exceeded the level of 81 rubles/$. For five trading days, the American currency added more than 4 rubles in price. The euro and yuan did not lag behind in terms of growth rates. The negative external economic situation with an increase in import operations, and expectations of an outflow of capital, including as a result of the exit of Western companies, and the tacit consent of the authorities to a partial devaluation played against the ruble. Under such conditions, market participants expect further weakening of the Russian currency. Although in smaller volumes, since now verbal interventions are expected from the financial authorities.

On Thursday, April 6, the dollar exchange rate on the Moscow Exchange for the first time in a year rose above the level of 81 rubles/$.

At the end of the main session, it rose to the mark RUB 81.46/$the highest since April 14 last year.

Taking into account a small correction at the close – up to 81.37 rubles / $, the US currency rose in price by more than 1.5 rubles during the day. The euro exchange rate rose by 1.86 rubles per day, to the level of 89.15 rubles / €, also updating the maximum since April 14 last year. The exchange rate of the Chinese currency added almost 22 kopecks per day. (almost 2%) and rose to RUB 11.8/CNY, the highest level since April 22, 2022. The confident rise in the rates of major foreign currencies continues for the fifth day in a row. During this time, the dollar has risen in price by 4.3 rubles. (5.6%), euro – by 4.8 rubles. (5.7%), yuan – by 61 kopecks. (5.4%).

Market participants attribute the current weakening of the ruble to the growth of import flows and a certain reduction in the supply of foreign currency on the market. According to Polina Khvoynitskaya, head of investment strategy and analytics at Expobank, in early February, a decree was signed that abolished the mandatory sale of foreign currency for certain categories of exporters. In addition, according to Mikhail Shulgin, head of the global research department at Otkrytie Investments, speculative demand for the currency may be spurred by concerns about filling the budget, because, “as it seems to the market, in order to balance the deficit, the authorities will turn a blind eye to the weakening ruble in the coming weeks “.

At the same time, the Central Bank does not seem to be very concerned about the potential impact of a weak ruble on inflation, the expert notes.

After all, due to the high base of 2022, annual consumer inflation in March-April 2023 could reach about 3.3%.

At the same time, experts also note an increased speculative demand for the currency due to the expected outflow of capital. In particular, on the eve it became known that for its share in the Sakhalin-2 project (27.5%), Shell will receive about 95 billion rubles, which it can withdraw from Russia. The Russian Foreign Investment Commission also approved a deal to sell the Russian assets of the Spanish group Inditex. The board of directors of the Turkish Dogan Holding approved the sale of a 50% stake in the fuel company Aytemiz Fuel Distribution to the Russian Tatneft for $160 million (see material next).

The acceleration of the fall of the ruble is associated, in addition to traditional fundamental factors, with the lack of any support from the authorities, said Vladimir Evstifeev, head of the analytical department of Zenit Bank.

At the same time, the reduction in the sale of yuan under the fiscal rule also signals a lack of concern about exchange rates, he notes. Thus, from April 7 to May 5, the Central Bank, as part of the budget rule, will sell Chinese currency for 3.7 billion rubles. In February-March, daily sales were in the amount of 8.9 billion rubles. However, even such volumes could not protect the ruble from weakening, Mikhail Shulgin notes.

And in the near future, experts expect the weakening of the Russian currency to continue, to values ​​of 83–84 rubles/$. At the same time, Mr. Shulgin believes that the dollar rate will not be able to gain a foothold at a level above 85 rubles / $ for a long period. As Polina Khvoynitskaya notes, at this level we should expect the activation of exporters in the sale of foreign exchange earnings. Vladimir Evstifeev is sure that, despite the current impressive scale of the ruble depreciation, the authorities are unlikely to “allow the uncontrolled devaluation of the national currency”, which is fraught with inflation acceleration and increased financial stability risks. And the longer the dollar exchange rate exceeds the level of 80 rubles, the more active will be the flow of verbal interventions in support of the ruble, he notes.

Vitaly Gaidaev