/ world today news/ The dollar on the stock exchange fell to 58 rubles, the euro to 60. The Russian currency has been strengthening since mid-March and updated its peaks. Despite the difficult situation in the economy, a second strong wave of growth is expected in the summer. We asked for the opinion of experts.
Currency restrictions
Analysts point primarily to purely technical factors. First of all, the so-called margin calls of market participants fell below 60 rubles.
That is, in order to reduce losses on open positions, they had to sell the currency and buy rubles, explains trader Artyom Zvezdin.
The tendency to strengthen the national currency appeared shortly after the spring crash. In the second half of March, the ruble showed incredible stability in the current situation and almost completely recovered its losses.
The current growth is largely artificial, to support the national currency in the face of unprecedented sanctions, greenhouse conditions have been temporarily created. The central bank restricted the movement of capital, currency operations. Non-residents were prohibited from selling assets.
“Foreign owners of Russian securities cannot sell them. There are restrictions on the purchase, withdrawal from accounts and transfer of foreign currency by Russian companies and individuals. Imports and the need for foreign currency are greatly reduced due to the sanctions and the withdrawal of many foreign companies from the country. Russians now travel less abroad,” explains Mark Goichman, chief economist at the “Teletrade” Information and Analytical Center.
Revenue from sales, taxes and gas
At the same time, exporters are required to sell 80 percent of foreign exchange earnings for rubles. Added to this are the upcoming corporate tax payments, the peak of which falls on May 25-27. Taxes – in rubles, it is necessary to additionally sell the currency. The total amount may exceed 1.1 trillion rubles, and this ensures an excess supply of dollars.
“Thus, a non-market position is maintained when the inflow of currency on the stock exchange is large, and the demand is relatively small. So the ruble shows growth – paradoxically in such a crisis,” Goychman clarifies.
In addition, European companies were forced to pay for gas in rubles. About half of Gazprom’s 54 foreign partners have already opened accounts for relevant transactions at Gazprombank, and some have made their first payments.
Finally, the ruble is supported by expensive oil.
Secondand wave
In the summer, a second wave of strengthening to 50 rubles per dollar is possible, predicts Yuriy Popov, a strategist for currency markets and interest rates at Sberbank.
But not in the coming weeks. The fact is that in June the three-month deposits opened in March with high interest rates will be paid off (then they grew by 2.6 trillion rubles, mainly due to a decrease in funds in current accounts by two trillion), the expert says.
“In addition, the demand for foreign currency from individuals is likely to increase sharply, which will put some pressure. In March, Russians sold currencies for 570 billion rubles, and in June the demand may be comparable,” he adds.
After the saturation of increased demand from individuals by mid-June, the strengthening of the ruble will resume, especially if exports remain high. At the end of the second quarter and the beginning of the third, an exchange rate of around 50 per dollar is not excluded.
Very expensive
However, the ruble will not strengthen too much. The strong ruble prevents the acceleration of inflation, the further increase in the price of imported goods, materials and components. On the other hand, it reduces the inflow of liquidity from exports, budget revenues and exporters.
The budget includes an exchange rate of 73 rubles per dollar. Falling below this level deprives the treasury of additional revenue. Therefore, the authorities will begin to influence the financial market.
In particular, they will reduce the mandatory foreign exchange gain sale rate from 80 percent to 50 percent for commodity exporters and zero for non-commodity exporters.
“The Central Bank is also likely to stimulate foreign exchange purchases by state-owned banks and importers in the coming months as stocks of imported goods and components in trade and manufacturing run low. After that, a return to 70-75 per dollar is inevitable,” Goychman said.
But until then, fundamentals must be in place to support the course. In particular, partial restoration of imports, including through alternative (“parallel”) channels, adds financier Konstantin Rybakov.
Thus, in the medium term, by the end of the year, the ruble is likely to return to the target of 70-72 rubles per dollar, which is more favorable for the budget.
Translation: V. Sergeev
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