The Ministry of Finance has changed its policy regarding foreign currency: what will happen to the ruble exchange rate

The risks of the authorities’ new tactics in the financial market are named

In the coming month, the Ministry of Finance will spend 73.2 billion rubles on the purchase of foreign currency and gold as part of the budget rule. We are talking about a change in tactics: in January, Siluanov’s department did not buy, but sold currency – for 69.1 billion rubles. In the common view, such measures are dictated, first of all, by the desire of the monetary authorities to influence the exchange rate of the national currency. But is this really so?

As the Ministry of Finance itself explains, a return to purchases became possible due to an increase in additional oil and gas revenues – according to the forecast, in February their volume will amount to 195.4 billion rubles. Well, in January, total raw material revenues turned out to be 122.2 billion rubles lower than expected, which is to some extent due to “adjustments in tax legislation regarding the excise tax on petroleum raw materials.” To even out the situation, from February 7 to March 6, 2024, the department will buy currency and gold worth 3.7 billion rubles every day.

Let us recall that the design of the fiscal rule, effective in 2024, is based on the cut-off price of oil of $60 per barrel of the Russian Urals grade. Revenues from the excess of the actual oil price of this base level are considered additional oil and gas revenues. They go to buy foreign currency on the domestic market. And if the actual price is below the cut-off price, then the sale of currency is provided. An important nuance: the agent for such operations is the Bank of Russia, which provides the Ministry of Finance with the necessary amount of funds.

To the inexperienced layman, this whole internal departmental kitchen, with its technical details incomprehensible to non-specialists, is hardly interesting. Another thing is the ruble exchange rate, which these actions influence in a certain way. In what degree? Experts interviewed by MK differed in their assessments of what was happening.

“Purchasing foreign currency traditionally creates additional demand for it,” says Igor Nikolaev, chief researcher at the Institute of Economics of the Russian Academy of Sciences. – As a result, the ruble is losing ground, which may well happen now. Moreover, there is a weakening trend: the psychologically important milestone of 100 per euro is just around the corner, and the dollar, having consolidated at around 90, is clearly ready to move on. Therefore, the measure carries certain risks. A weak, unstable ruble always spurs inflation, which today, before the presidential elections, the state absolutely does not need. However, the dynamics of consumer price growth have recently slowed down, which the Central Bank noted with satisfaction.”

Apparently, the monetary authorities considered the operation scheduled for February-March to be economically safe. According to Nikolaev, the Ministry of Finance is guided by completely pragmatic considerations: dollars and euros can still be useful, especially taking into account the sanctions restrictions. So why not bribe them when the opportunity arises?

“The motives of the Ministry of Finance are clear: it expects that in February additional oil and gas budget revenues will amount to 195.4 billion rubles,” says Valery Tumin, a member of the Expert Council for the Development of the Digital Economy under the State Duma Committee on Economic Policy. – Actually, purchases will take place within the framework of the budget rule, when excess income is used to replenish the National Welfare Fund. And taking into account the fact that in January, on the contrary, foreign currency was sold due to a shortage of oil and gas revenues from the budget, such a measure will have a positive impact on the ruble exchange rate. It will allow it to strengthen in conditions when the supply of foreign currency from exporters has noticeably decreased on the domestic market. I believe the quotes will be about 90 rubles per dollar, 95.5-96 per euro and about 12.5 per yuan.”

The operation planned for the next month is of a purely technical nature, notes Alexey Vedev, director of the Center for Structural Research at RANEPA. In his opinion, the total amount of 73.2 billion rubles, which will be spent on the purchase of foreign currency and gold, is too insignificant to seriously affect the exchange rate. The measure is largely due to the February oil price – higher than in January. “I think the Ministry of Finance is quite satisfied with the current quotes of around 90 per dollar: approximately this average annual rate was included in the budget law. But citizens and legal entities would be more satisfied with a corridor from 80 to 85,” the expert believes.