Ruble strengthens during New Year holidays
While Russia was celebrating the New Year, the Russian national currency has been steadily growing, partly ceased to be dependent on oil prices and the dollar due to the rise in the US Federal Reserve's rate.
On January 3, the dollar exchange rate fell below 60.5 rubles at the Moscow Exchange, ending the day at 60.90 rubles per $1. On the morning of January 5, the dollar fell to 60.1 rubles.
This morning, the dollar exchange rate briefly rose above 60 rubles, but now it is trading below this psychological level, at 50.82 rubles per $1.
Advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to Vestnik Kavkaza, noted that the current situation is not comfortable for the government, so we should expect the growth of the dollar at the government's expense. "The sharp appreciation of the ruble is bad for exporters and filling of the federal budget: the budget is filled by official receipts from oil exports by 43%, and taking into account those sectors, which are somehow connected with it, by 65%. In these conditions, it is likely that the Central Bank will start to replenish its international reserves: on the one hand, it will increase them, on the other hand, it will help to reduce the ruble," he expects.
According to the expert, at the moment the rate of 65 rubles per $1 is comfortable for the government . "On the one hand, such level will not disperse inflation, but on the other hand, will make Russian exports highly competitive. Therefore, while the ruble may be strong enough, but in the long term, there is a fairly high probability that it will be weakened," Sergey Hestanov said.
A professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, explained such an increase of the ruble speculative money in the Russian economy. "The ruble was one of the strongest currencies on the results of 2016: while all world currencies fell against the dollar, the ruble rose by almost 25%. So speculative money strengthened the ruble, as Russia has become profitable for speculators," he explained.
According to him, this is part of the Russian financial authorities' plan to attract real foreign investments in the economy. "By stimulating the influx of short-term speculative money due to the difference between the key rate and the inflation rate of 5 percentage points, the Central Bank and the Ministry of Finance are keen to show that the Russian economy has stabilized. They hope that more serious foreign money will come in Russia in the second half of the year. But if oil falls, the short-term capital will begin to migrate back and it will further provoke the devaluation of the ruble," Alexander Abramov warned.