The ruble will weaken, but slowly

This was stated by Deputy Chairman of the State Duma Committee on Economic Policy, Doctor of Economics Mikhail Delyagin, during a press conference at the DOS, when answering a question about how the national currency and consumer prices will change this year.

The first two months of 2023 set new trends in the foreign exchange market: after falling slightly, the dollar, the euro and the Chinese yuan began a slow but steady growth against the ruble. According to many experts, these trends will only strengthen against the backdrop of new sanctions imposed against Russia. Some even predict the dollar at 200 rubles, but most analysts are skeptical about such forecasts.

According to Mikhail Delyagin, the depreciation of the ruble will not be sharp and fatal, it will weaken gradually, as it happened recently:

“The problem is that, unfortunately, the key element that determines our economic policy is the commodity oligarchs. For a commodity oligarch, that is, a businessman who controls a significant part of the state, and this control brings him profit, which he cannot refuse under any circumstances, for him a cheap ruble is what is needed, as this provides him with additional profit . On the other hand, for the state, which blocks the development of the country and the development of the economy with an artificially created money shortage, the only way to replenish the budget is the weakening of the ruble.

From the point of view of the development of the domestic economy, this, according to Mikhail Delyagin, is absolute madness:

“Because this will lead to a washout of Russian production by cheap imports. Any responsible state, on the contrary, provides a strong national currency in order to purchase investment goods and modernize production, protecting the economy through tough protectionism, which is impossible under the WTO.”

If we talk about prices, then, according to the economist’s forecast, they will continue to grow:

“Rise in prices today is restrained only by the poverty of the population. And since the poverty of the population is expanding very quickly, prices will also rise without much jumps. <…> We, unfortunately, have a country of victorious arbitrariness of monopolies. A significant part of those who still manage the economic and financial spheres sincerely believe that the only freedom of enterprise that deserves attention is the freedom of the monopolist to rob the consumer, including by inflating prices. Therefore, our prices are rising under any circumstances. Even when we are told about deflation (i.e., lower prices), it causes nothing but anger in people who go to the store every day. As one of the smartest people in the State Duma, and from United Russia, said, “after we subordinated Rosstat to the Ministry of Economic Development, we can handle any indicators!” From myself I will add: yes, any, except for reality.

As Mikhail Delyagin explained, inflation of 4% per annum is included in the federal budget, and price growth is 3.2%, but, in his opinion, officially recognized inflation by the end of the year may be about 8%. However, as any Russian who regularly visits stores knows, real inflation, as a rule, is several times higher than officially recognized …

Sergei Ishkov.

Photo by Moskovskaya Pravda