Forecasts for ruble’s exchange rate worsened
Russia’s top bank Sberbank has worsened its forecasts for the ruble’s average annual exchange rate against the U.S. dollar for 2019–2020.
The bank worsened the rate for 2019 to 68.5 rubles per U.S. dollar and for 2020 to 79 rubles.
Sberbank also expects the Russian central bank to cut its key rate to 7.5% in 2019 and to reduce it further to 7% by 2020. The bank also sees Russia’s inflation to reach 4.8% and 4% in 2019–2020, respectively, TASS reported.
Forecast for Russia's GDP growth 1.4% and 2% in 2019 and 2020 wasn't changed.
In the new version of the forecast, the average annual price of Urals oil in 2019 and 2020 is set at $62 per barrel.
Chief researcher at the Institute of International Economic Relations Studies of the Financial University under the Russian government Valery Abramov, speaking to Vestnik Kavkaza, noted that in the next two years the ruble exchange rate will be pulled down by a few macroeconomic trends. "First of all, by the state of the Russian economy, which shows very low economic growth. Then, low competitiveness of the main non-resource sectors of the Russian economy, which requires a change in the economic model and economic restructuring. In addition, we should not forget that the ruble highly dependent on the conjuncture of world markets and energy-related goods," he listed.
"In addition, there is a negative impact from the ongoing sanctions of, primarily, the United States and the EU, which reduce opportunities for external borrowing, which increase the burden on the implementation of public debt. In terms of external borrowing, Russia must repay corporate debts, largely represented by the banking sector and our largest state corporations, by lowering the exchange rate of the national currency" Valery Abramov added.