The ruble relies on market conditions – Kommersant FM

The ruble is trading around 97.5 rubles. for a dollar. On October 16, exporters began selling foreign currency earnings, and the strengthening of the national currency will be gradual, economists agree. And the government is discussing another measure, Kommersant found out, exchange rates could be tied to world prices. If the price of an exported product falls below a certain level, then the duty will not be applied, as in the case of a depreciation of the ruble.

This will not provide significant support to the ruble, Iskander Lutsko, chief investment strategist of the investment company Aygenis, is sure:

“The first reaction was when the rate dropped from 101 rubles. per dollar to current levels. We should now see the functional impact based on the physical flows that are expected with the repatriation of foreign exchange earnings and as part of its increased sales volume. I would not assume that this will be a significant strengthening, but rather a gradual one. At best, we’ll end up with a value closer to 90 rubles.”

Earlier, Vladimir Putin said that the Russian budget needs an exchange rate slightly lower than the current one. He noted that “if everything had been normal,” then there would not have been a decree on the mandatory sale of foreign currency earnings by exporters. Will the ruble finally be able to break away from the 100 ruble mark? for a dollar? Yaroslav Kabakov, director of strategy for the Finam group, believes that at least there will be no weakening of the Russian currency this week:

“We can expect a certain strengthening of the ruble, but not related to the sale of currency, not to the actions taken, but still to the market reaction that should follow. And many participants will now postpone the purchase of currency just as part of the expected influx of liquidity.

As for sales, I think we won’t see a sharp increase in volumes now. The calibration of the current market will take place over the next few weeks. And do not forget, after all, the influx of foreign exchange earnings from higher oil prices was planned even outside of the actions taken, and in this regard, the situation is now on the side of the ruble.”

There are no fundamental factors on the market yet that could help strengthen the ruble; on the contrary, demand for the currency is still high. So if the weakening of the ruble can be delayed, it will only be for a few months, says Oleg Komolov, associate professor at the Financial University under the Government:

“The authorities’ decision to establish a mandatory rate for the sale of foreign currency earnings, of course, had an impact on the ruble, but this is more of a psychological effect. 80% of foreign currency earnings will be credited to Russian accounts, of which 90% will be sold. A simple arithmetic operation allows us to see that 72% of what exporters receive will be sold on the domestic market in this way. Moreover, back in August, the ratio of net foreign currency sales to foreign currency earnings of the largest exporters was 72%. This figure was reached in August.

Now we are talking about setting a minimum bar that will raise the average sales level from 72% to a higher value. The actual specification of the sales level at the end of last week added only tenths of a percent to the ruble exchange rate. And there are no significant prerequisites for strengthening from current levels.

The predicted range remains the same – 90-100 rubles. per dollar until the end of 2023. But here the measures taken by the Central Bank will have a greater impact. Let’s not forget about the delayed impact of the rate increase, the refusal to purchase foreign currency on the domestic market within the framework of the fiscal rule, and the introduction of new export duties tied to the exchange rate. All this will, with a certain lag, allow the ruble to, if not strengthen, then at least be stable.”

Analysts do not rule out further measures from the Central Bank: it has already raised the key rate three times in recent months and it is possible that it will do so at the next meeting in two weeks.

Inflation in September exceeded 6% on an annualized basis. Deputy Chairman of the Central Bank Alexei Zabotkin said that inflation at the end of the year will be in the range of 6-7%, and the Bank of Russia will reach the target of 4% by December 2024.

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Daniil Babkin, Ivan Koryakin