In July, the Russian currency showed weakening on the Moscow Exchange. During the month, the dollar rate added about 4% and exceeded the mark of 74 rubles, while the euro rate increased by more than 10% and reached 88 rubles.
The official exchange rate of the Central Bank as of August 1 was set at 73.43 rubles per dollar and 87.29 rubles per euro.
According to experts, in the near future the situation with the coronavirus pandemic will become the determining factor for the national currency. According to Johns Hopkins University, the number of COVID-19 cases in the world continues to grow and is currently approaching 17.6 million. This situation raises concerns among investors about the prospects for the global economy, so market participants are selling risky assets, including the ruble.
“We see that in recent years the ruble has dropped noticeably against the dollar and the euro. The observed weakening of the national currency is associated with the growing risks of a slowdown in the global economy. As a result, investors are trying to buy euros or gold more often as a reliable means of saving money, "Ivan Kapustyansky, a leading analyst at Forex Optimum, told RT.
In addition, after another reduction in the key rate by the Central Bank to a historic low, foreign investors began to buy less federal loan bonds (OFZ). As a result, the demand for rubles from foreigners decreased further.
“Reducing the key rate of the Central Bank is the right decision for the economy, as it leads to cheaper loans for businesses and the population. At the same time, the low rate reduces the profit of investors who own government securities. As a result, investments by non-residents in Russian bonds have decreased, which puts pressure on the ruble, "Artyom Deev, head of the analytical department at AMarkets, explained in an interview with RT.
According to Dmitry Babin, an expert on the stock market "BCS Broker", investors are alarmed by the possibility of aggravation of the US sanctions rhetoric against Russia. In July, the United States House of Representatives approved the draft defense budget for fiscal 2021, which contains amendments to strengthen restrictions on the Russian Nord Stream 2 gas pipeline.
“The fact is that with the approach of the November US presidential elections, sanctions and other foreign policy risks for Russia are increasing. So, we are already seeing the resumption of anti-Russian rhetoric and sanctions initiatives in the West, "Dmitry Babin explained in a conversation with RT.
In addition, in August, the ruble may be slightly affected by increased demand for foreign currency among Russians due to the partial opening of borders. This point of view in an interview with RT was expressed by Ksenia Lapshina, an analyst at the QBF IC. As a reminder, from August 1, Russia resumes flights with Great Britain, Turkey and Tanzania.
“As a result of the gradual opening of borders and the start of international flights, Russians will hasten to escape abroad, at least for a short time, so the demand for dollars and euros from travelers will increase. This factor will not become a key factor for the ruble, but it will definitely make its own contribution, "Ksenia Lapshina noted.
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Note that some weakening of the national currency has a positive effect on the activities of Russian exporters. As the director of the Academy of Finance and Investment Management Arseny Dadashev explained to RT, the depreciation of the ruble leads to a decrease in the cost of Russian goods on the international market and thereby makes domestic products more competitive. Moreover, such dynamics of the exchange rate allows reducing the budget deficit and more actively replenishing the National Welfare Fund (NWF), the expert emphasized.
“The fund receives revenues from the sale of oil worth over $ 42.4 per barrel. For a long time, the NWF remained without new receipts, which was associated with the collapse of the oil market during the pandemic. However, the price of Russian Urals crude began to recover in June. There is no Russian currency in the NWF, but only foreign currency - the dollar, euro and pound. This means that in terms of rubles, the fund's reserves are being replenished, ”Dadashev explained.
According to experts, in August, the actions of the Bank of Russia will provide some support to the ruble. Recall that in order to stabilize the exchange rate from March 10, the regulator began proactive sale of foreign currency in the domestic market. Thus, the Central Bank artificially increases the demand for rubles. In total, during this time, the volume of currency sales exceeded 1 trillion rubles.
In addition, relatively stable oil prices will play in favor of the ruble, experts say. In July, the cost of raw materials of the Brent benchmark mark on the ICE exchange in London added about 2.5% and was fixed in the range of $ 43-44 per barrel.
Analysts explain the positive dynamics of quotations by the gradual restoration of the balance of supply and demand in the global hydrocarbon market. In their latest report, experts from the Organization of Oil Exporting Countries OPEC improved their forecast for demand for raw materials in 2020. According to the alliance, by the end of the year, the consumption of energy resources in the world may decrease by 8.95 million barrels per day - to 90.72 million barrels per day. Earlier, OPEC had expected a decrease in the indicator by 9.08 million - to 90.59 million barrels per day.
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“Recently, Brent oil has formed a solid base in the region of $ 44 per barrel for further growth. We believe that the target level for quotations for the coming months will be the level of $ 60 per barrel. Rising prices for raw materials will provide significant support to the ruble, ”explained Ivan Kapustyansky.
In general, the experts interviewed have different assessments of the further dynamics of the Russian currency, but at the same time they do not expect sharp collapses of the ruble in August. According to Ksenia Lapshina, in the coming month the dollar exchange rate may overstep the mark of 75 rubles, while the euro exchange rate will fluctuate in the range of 87-89 rubles. At the same time, Arseniy Dadashev, admits a decrease in indicators to 72-73 and 84.4-85.4 rubles, respectively.
“August is a historically difficult month for the Russian currency, but this year is, in principle, abnormal, so it will be difficult to surprise with something. Most likely, the dollar exchange rate will tend to a range convenient for budgeting - 72-75 rubles. In turn, the euro rate will move in the corridor of 82-88 rubles, "Anna Bodrova, senior analyst at the Alpari information and analytical center, added in a conversation with RT.