The foreign exchange market is now half natural and half artificial. As before, the rate depends on the balance of supply and demand in the currency section
A photo: MOSCOW City News Agency
Ruble cheaper again. And dollar, and the euro are gaining in price for the second week in a row. On average, prices rose by about 10%. For a dollar they give more than 63 rubles, and the European currency is rushing to 70 rubles. What’s happening? And what to expect next? Here, let’s look into this.
WHY DID YOU SUDDENLY WEAK?
The main reason for the weakening of our currency is the risk of new sanctions. And although the EU countries have not yet agreed on the ninth package. Everyone understands that this is a matter of time. True, such swings are not new to our currency. We have already observed such behavior of quotes several times this year.
For example, at the end of May and at the end of June, the dollar exchange rate sank to its minimum values. First, at 56 rubles per dollar. And then even up to 51 rubles. And then it started growing again. Each time it seemed to everyone that this is it – a natural rise in price, which will end with the dollar again being above 100 rubles.
But no. Each time growth stumbled. This is likely to happen in December as well. At least, none of the analysts expects a collapse of the ruble.
– In our opinion, the local increased demand for foreign currency is due to the risks of the upcoming ninth package of EU sanctions against Russia, as well as the fact that exporters have not yet revived on the eve of the December tax period. The estimated range until the end of the week is 64 – 62 rubles per dollar, – believes Mikhail Shulgin, Head of Global Research Department “Opening Investments”.
How the ruble exchange rate has changed since the beginning of the year
A photo: Nail VALIULIN
FORECAST FOR THE END OF THIS YEAR AND ALL NEXT
But! What was, was. It can’t be returned or changed. We are much more interested in what will happen now. Will the dollar continue to rise? Or will it go down, as it has already happened this year?
In the current conditions, it is difficult to give a real forecast. However, as always. Most experts believe that the ruble will strengthen further by the end of the year. Like, the tax period will work. Exporters will start selling foreign exchange earnings in order to give money to the budget. Therefore, the ruble exchange rate will either remain unchanged or increase.
But next year, most experts have a different forecast. Most likely, the ruble will sink a little. And the budget includes a rate of 68 rubles per dollar. And independent appraisers believe that the most realistic prospect is 70 rubles per dollar. That is, the ruble may lose about 10%.
However, this is hardly something to be afraid of. At the beginning of the year, the dollar was more expensive. For example, at the end of January, more than 78 rubles were given per unit of American currency. The situation in the world economy is improving. Perhaps the great and terrible crisis will not happen after all. And this is good for those who sell commodities. Demand for them will remain stable. No one will forbid us to sell oil, gas and metals. And there will be foreign exchange earnings, the ruble exchange rate will be relatively high.
– US inflation data suggests a less aggressive US rate hike cycle. At the same time, China is gradually easing anti-COVID restrictions. Taken together, the two factors indicate that global demand for commodities could remain robust into 2023. In theory, this should support the exchange rate of the Russian currency, Mikhail Shulgin believes.
And what are we to do?
Hence, probably, the main question that worries many is whether it is worth buying currency now? When the dollar and the euro rise, the answer to this question becomes even more relevant. And here experts advise to be as pragmatic as possible.
What is the currency for? Basically, only two things. The first is for travel abroad. If you are going somewhere, buy as much as you need in the exchanger. There is no longer a shortage of currency, in cash it can be found in almost all major banks.
The second reason to buy a currency is diversification. If you are afraid that the ruble will depreciate, then you can buy some dollars and euros. But, as they say, without fanaticism.
Keeping money in non-cash currency is risky now. No one knows what will be in the next package of sanctions, and whether our foreign exchange savings will be frozen by some overzealous European commissioners.
In addition, it is not logical to simply keep money in foreign currency and not receive income from your savings. Lost profits will be decent. As an option, you can buy bonds of Russian companies denominated in foreign currency. And thus receive 3 – 4% on their savings. This can be done on the same Moscow Exchange, where the exchange rate is determined, only on the stock market. To do this, you will need to open a brokerage account in any major bank.
Recall that the currency market is now half natural and half artificial. As before, the rate depends on the balance of supply and demand on the currency section of the Moscow Exchange. But when a limited number of buyers and sellers participate in the auction, the rate is not entirely correct. So, exporters and importers are now mainly trading in currency. And the business of both those and others is now difficult. Finding customers and making payments is difficult. Coming up with schemes to circumvent sanctions is creative, but labor-intensive. Therefore, trading volumes are small.