The dollar exchange rate rushed into the abyss: will there be 100 rubles

Experts gave a forecast for changes in currency quotes

The dollar exchange rate on domestic currency exchanges exceeded 87 rubles, while the euro rose above 95 rubles. The national currency has not been quoted so cheaply since the extreme March 2022. Experts argue that such a course is beneficial for the government, which allows it to increase export earnings in rubles and thereby reduce the budget deficit. For ordinary people, the depreciation of national banknotes does not bode well: inflation could double the level planned by the government, which would lead to higher prices in stores and force many Russians to abandon resort trips.

The exchange rate of the Russian currency is flying into the abyss. Since the beginning of July, the euro has risen in price by nine rubles, and the dollar – by six. The last time “wooden” fell below this level in March last year, but then its value stabilized: by the end of spring 2022, “American” and “European” were already trading at the level of 56 and 53 rubles, respectively. A similar change in the mood of exchange players, analysts are sure, will not happen this time.

There are fundamental reasons for pressure on the value of the Russian currency. Foreign companies intending to say goodbye to doing business in our country are selling their property, demanding dollars and euros for their assets. The European Central Bank called on the credit organizations of the continent, which retained financial resources in Russia, to expedite the withdrawal of their units from the market of our country. From March 2022 to March 2023, the firms that left our country concluded about 200 transactions, as a result of which, according to the most conservative estimates, the total amount of withdrawn capital amounted to about $40 billion.

“Naturally, the exchangers used by the majority of the inhabitants experienced a lack of free currency, which led to an increase in the selling rate for the dollar,” says Sergey Suverov, investment strategist of Arikapital Management Company. “In turn, in commercial transactions, buyers of Russian property demanded almost 200 rubles for the resources offered by entrepreneurs leaving the market for every dollar in which the market value of their assets was estimated.”

According to Vladimir Chernov, an analyst at Freedom Finance Global, the exchange rate formed on trading floors is beneficial to the state and, first of all, to the Ministry of Finance, which is responsible for the filling of the Russian budget, since export revenues in the depreciation of the “wooden” in ruble equivalent will increase in June by 10- 15% compared to May figures. This means that tax revenues to the budget from exporters will increase by the same amount.

Meanwhile, as experts predict, the rate of 90 rubles per dollar and 100 rubles per euro is not far off. The upcoming economic recession in Western countries, which may result in a decrease in demand for energy resources, will lead to a significant drop in oil prices: instead of $70-75 per barrel, at which Brent is currently traded, the cost of a “barrel” may reach $40-50. In such circumstances, the ruble will rapidly devalue. Against this background, it is interesting to observe the position of the financial bloc of the government. Last year, First Deputy Prime Minister Andrei Belousov called the “comfortable exchange rate” of the Russian currency at 70-80 rubles per dollar. At the beginning of this June, he named a different range of “comfort” – 80-90 rubles. If by the end of the year the dollar rises in price by another gold piece, then this will not surprise anyone, Suverov argues. The federal budget deficit of almost 3.5 trillion rubles accumulated over five months is at risk of doubling by the end of the year. Officials usually prefer to close holes in the treasury by devaluing national banknotes – due to this option, export earnings increase.

“In the role of the last, as always, will be the domestic market – inflation will accelerate from the current 2.5-3% to 6-7%,” the expert believes. – The growing cost of foreign goods will gradually be transferred to Russian products, which will affect the wallets of almost all consumers. Under these conditions, our compatriots, who are counting on a trip to a foreign resort for the New Year, should now save up additional funds for vacations or completely abandon foreign tourist voyages.”