The ruble did not estimate revenue – Kommersant FM
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The government has revealed details of new currency controls. But the ruble did not react to them in any way. On October 13, the authorities explained exactly how the mechanism for the mandatory sale of foreign currency earnings would work. Exporters will be required to return 80% of the earned currency to the country, and 90% of this amount will be sold on the stock exchange. This must be done within two weeks. For comparison, after the outbreak of hostilities in Ukraine, exporters had to sell 80%, but within three days.
Vladimir Putin also spoke about the situation on the foreign exchange market. He said that for the budget the rate should be “a little lower.” But this did not convince the market: the dollar remained at 97 rubles, and the euro continued to trade around 102 rubles.
Can the situation change? Arikapital investment strategist Sergei Suverov reminds that currency sales under the new mechanism will begin on Monday, October 16, but this will not have much impact on the market:
“The mandatory sale of foreign currency earnings became known in the middle of the week, and then the ruble strengthened quite strongly – by as much as 3 rubles. The national currency exchange rate decreased from 100 rubles. up to 97 rub. for a dollar.
But the mandatory sale of foreign currency proceeds will not have a radical impact on the foreign exchange market. The fact is that, according to the Central Bank, exporters were already selling approximately 80-85% of foreign exchange earnings on the market, now a little more will be sold – 90%. But this does not fundamentally change the balance of power.
The significance of the mandatory sale of foreign currency earnings is more psychological. This suggests that the government is ready to defend the ruble and not allow it to fall below 100 rubles. for a dollar. Maybe we will see 95 rubles. per dollar, but the ruble is unlikely to strengthen further.
The government’s tools are not limitless. There may be some foreign exchange interventions left in stock, but they are quite problematic given the fact that there are not many foreign exchange reserves in Russia now. There may also be some additional restrictions on the movement of capital, for example, a reduction in the amount of transfers abroad.”
According to the regulator, the real effective exchange rate of the ruble has decreased by 30% over nine months. Vladimir Putin, during his visit to Kyrgyzstan, said that dollar levels are not related to any problems in the economy. True, a few seconds before this, he said that “if everything was normal,” then the decree on the mandatory sale of currency would not appear.
The president explained the desire to keep revenue abroad with the phrase “the need for invention is cunning.” However, according to the Central Bank, exporters leave no more than 1% of funds in foreign accounts. Even despite currency controls, the devaluation of the ruble will not be contained, economist Nikolai Korzhenevsky believes:
“According to first estimates, it turns out something like this. If we count the flop, that is, $100 in revenue, the exporter must sell $72 on the domestic market. But if we remember the latest publications and estimates of the Bank of Russia, then exporters have been selling approximately this much lately.
It turns out that in general this decree will not radically change the volume of currency supply on the Russian domestic market.
What is affecting the ruble now and in what direction? If we talk about market factors, the key thing that now affects the foreign exchange market is, as usual, the situation with the balance of payments and the budget. The balance of payments situation continues to deteriorate. At the end of 2023, the current account surplus will be approximately five times less than in 2022.
At the end of next year, 2024, the current account surplus is likely to be 10 times less than in 2022. The current account is some kind of theoretical value that shows how much currency can come into the country. But we see how quickly this influx is declining. Therefore, from this side there is definitely pressure on the ruble, and we see it in quotes. Given what we already know about the budget, if we assume that next year the current account surplus will be around $30 billion, then in any case these are three-digit ruble quotes. More likely, around 110-120 rubles. for a dollar.”
Against the backdrop of devaluation, inflation in Russia is accelerating: in September it amounted to 6% in annual terms and at the end of the year, as Kommersant FM’s interlocutors say, it will go beyond the regulator’s forecast.
The Bank of Russia has already raised its key rate three times in three months. Now it is 13%. The next meeting is in two weeks, and the regulator will again consider the feasibility of raising the rate, said Deputy Chairman of the Central Bank Alexei Zabotkin. Previously, Elvira Nabiullina explained that the effect of these decisions is offset by the generosity of the state, which subsidizes many loans from the budget and makes it difficult to reduce demand.
Everything is clear with us – Telegram channel “Kommersant FM”.
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