For the first time since March 2020: the euro exchange rate on the Moscow Exchange fell below 76 rubles

On Tuesday, April 26, the Russian currency strengthens on the Moscow Exchange.

At the beginning of trading, the dollar fell by 1.5% to 72.06 rubles.

At the same time, the euro exchange rate fell by 1.6%, to 75.95 rubles, the lowest level since the beginning of March 2020.

Thus, the indicator returned to pre-pandemic values.

Over the past month and a half, the national currency has risen in price against the American and European ones by more than 40% and was able to fully win back the sanctions losses of the current year.

The observed dynamics is largely related to the measures taken by the government and the Central Bank, as well as to changes in the terms of foreign trade.

Mikhail Zeltser, an expert on the stock market at BCS World of Investments, told RT about this.

“By the pace and scale of the recovery, we see a historical strengthening of the ruble, and there are reasons for this.

There is an imbalance in the supply and demand of foreign currencies on the Russian market.

At the request of the authorities, exporters are actively selling foreign exchange earnings, and imports are now limited by Western sanctions,” Zeltser said.

Since the end of February 2022, the United States, the European Union and a number of other states have continued to introduce ever new economic restrictions against Russia.

This is how the West reacts to the conduct of a military special operation in Ukraine.

Restrictions, in particular, affected the banking industry, the energy sector and trade.

Along with this, almost half of the country's gold and foreign exchange reserves (worth $300 billion) were frozen, and many international companies announced their withdrawal from the Russian Federation.

Initially, the actions of Western countries caused an emotional reaction from the Russian market.

If at the time of the announcement of the first restrictive measures, the dollar exchange rate fluctuated in the range of 76-80 rubles, and the euro exchange rate in the region of 86-91 rubles, then already in early March the values ​​briefly rose above 121 and 132 rubles, respectively.

To stabilize the situation, the authorities took a set of measures.

Thus, the Central Bank temporarily raised the key rate to 20% per annum, suspended trading in securities in Russia, limited the withdrawal of capital abroad and closed access to exchange trading for foreigners.

In turn, the government, in order to support the ruble, canceled VAT for citizens when buying gold and obliged exporters to sell 80% of their foreign exchange earnings.

Along with this, the Central Bank introduced a temporary procedure for the circulation of cash currency in the country.

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In addition to the initiatives of the regulator and the Cabinet, the ruble responds positively to the growing controversy within the European Union regarding further anti-Russian sanctions.

This opinion was shared with RT by the investment strategist of Arikapital Management Company Sergey Suverov.

At the moment, the European authorities are discussing the imposition of an embargo on the import of energy resources from Russia.

However, there is still no unity among the countries of the region on this issue.

Thus, a number of EU states oppose a ban on the purchase of raw materials from Moscow.

“Europe has not yet introduced a full embargo on Russian energy carriers and is gradually recognizing its dependence on energy raw materials from Russia.

That is, European politicians give a signal to the market that the embargo, most likely, if it will operate, then in a limited format, ”Suverov explained.

According to Mikhail Zeltser, in the near future Europe will be forced to continue buying Russian gas due to the lack of alternatives.

At the same time, you already have to pay for fuel in rubles, which provides additional support for the national currency, the analyst added.

Recall that on April 1, in Russia, on behalf of Vladimir Putin, a new settlement procedure was introduced for the supply of natural gas to unfriendly countries.

Now Moscow accepts payment for energy raw materials only in rubles.

To do this, foreign buyers must open two special accounts with Gazprombank: in foreign currency and in rubles.

First, the money must be transferred to a foreign currency account, after which the bank on the Moscow Exchange will exchange these funds for rubles and credit them to the ruble account.

Immediately after that, the foreign partner will be able to transfer rubles directly to the gas seller.

Internal weakness

The observed depreciation of the euro against the ruble is also partly due to the weakening of the single European currency in the international market, Mikhail Zeltser believes.

The specialist connects the current state of affairs with the deteriorating situation in the eurozone economy.

“In addition to the rise in energy prices and the food crisis, the positions of the European currency are being hit by the monetary factor of the ECB.

The European Central Bank has already announced stimulus programs and even interest rate hikes.

However, the activity of the regulator in the fight against inflation is very low, which is why the euro loses to the dollar on the world market,” Zeltser said.

It should be noted that since the introduction of anti-Russian sanctions, the exchange rate of the European currency against the American one has decreased by almost 6% and at the auction on April 26 reached $1.067 per euro.

The last time a similar indicator could be observed was in March 2020.

According to Mikhail Zeltser, the observed trend will continue in the foreseeable future and may even lead to parity by the end of this year.

In other words, the dollar and the euro may become equal, the analyst did not rule out.

The course for mitigation

Taking into account the observed depreciation of the dollar and the euro on the Moscow Exchange, the Bank of Russia began to gradually soften the previously introduced measures to support the ruble.

Thus, the regulator has already reduced the key rate from 20 to 17% per annum, eased a number of foreign exchange restrictions for citizens and increased the period for the mandatory sale of foreign currency for exporters from three to 60 business days.

As experts explain, in the current conditions, a too strong ruble is unprofitable for the economy, since an expensive national currency reduces the volume of export revenues to the budget.

Against this background, in the near future the Central Bank will continue to remove restrictions, analysts say.

“I think the next step will be to soften the rules for the sale of foreign exchange earnings for exporters.

They can, for example, reduce the mandatory sales ratio from the current 80%.

In the medium term, the ruble will start to weaken slightly against the backdrop of currency easing.

We expect that by the summer they will give about 80 rubles per dollar, ”suggested Sergey Suverov.

A similar point of view is shared by Andrey Maslov, an analyst at FG Finam.

According to the specialist, over the next few months, the dollar may begin to return to the level of 80 rubles.

However, the authorities will not allow the figure to rise to 90 rubles, since in this case, imports may become too expensive, the expert added.