Canister of petrodollars

Slowing capital outflow is not a guarantee against devaluation

In October, capital outflow from Russia slowed down, and banks are less actively buying foreign currency and taking it abroad, First Deputy Chairman of the Central Bank Alexei Ulyukaev said on Saturday. However, according to experts, the size of capital outflow is not the only threat of a significant devaluation of the ruble in the coming months. World oil prices are no less important: if they continue to fall, the Central Bank will have to weaken the national currency. On Friday, the ruble refrained from falling - the dollar rose in price by only 0.3%, to 27.05 rubles, the value of the bi-currency basket remained at the level of 30.4 rubles.

Mr. Ulyukaev explains the outflow of capital from the country, which amounted to $7 billion in August and $25 billion in September, not only by the departure of foreign investors from the stock market, but also by the actions of Russian banks, which were actively buying foreign currency. “Bank clients place foreign currency deposits. Well, for example, based on the fact that the dollar perspective seems attractive to them, because recently the dollar has been strengthening against all currencies, including the ruble,” says Mr. Ulyukaev. -- As a result, banks end up with a large number of foreign currency liabilities. They may try to place them in foreign currency assets, that is, issue loans in foreign currency. Another option is to place these funds in deposits of foreign banks for a short period of time. This happens for a very short period of time - an “overnight” loan, that is, until the next day. Or a weekly deposit. But statistically this means capital flight. And these figures are comparable to the entire volume (of capital outflow in September - Ed. ).” According to Mr. Ulyukaev, Russian banks placed about $20 billion abroad in September, which is close to the value of the volume of capital outflow for the month: “By this indicator, we see that already in October there is a slight reduction (of outflows. -- Ed. )".

Mr. Ulyukaev did not predict the magnitude of capital outflow in October, assuring only that it “will be significantly less than in September.” The purchase of currency by both foreign banks and some Russian ones contributed to the emergence of rumors about the impending devaluation of the ruble. Market participants expected the national currency to collapse in mid-October, but this did not happen. Since then, government representatives have been convincing their fellow citizens with enviable consistency that there are no grounds for the depreciation of the ruble. “We still have a good balance of payments, large reserves,” says Mr. Ulyukaev. - All the fundamental circumstances of our economy are not bad at all. And just because there is a global financial crisis, the waves of which are reaching us, it does not at all follow that the ruble should be devalued relative to the currencies of other countries.” Explaining the actions of the Central Bank in the foreign exchange market, Mr. Ulyukaev said: “We do not play against global trends, but we protect our citizens and companies a little from the extremes of these movements.”

In order to “protect citizens a little,” the Central Bank regularly spends billions of dollars to support the ruble exchange rate . According to analysts, last week alone the Bank of Russia spent about $13 billion on foreign exchange interventions. In total, since July of this year, gold and foreign exchange reserves have decreased by $80 billion. However, as stated in the analytical report of the ING bank, the current volume of gold and foreign exchange reserves (515 .7 billion dollars) is enough for Russia to prevent the devaluation of the ruble at least in 2008. In addition, the collapse of the national currency is not a problem of the Central Bank alone, but of the entire economy. In particular, this could lead to an increase in external debt, rising inflation, panic among the population and the flight of depositors who have ruble deposits. However, analysts at ING Bank point out that in 2009, if oil prices fall below $60 per barrel, the Central Bank may have to reconsider its policy, which means there is a small chance for the devaluation of the ruble.

Recently, in an interview with Reuters, MICEX President Konstantin Korishchenko compared the ruble to a canister of oil, the cost of which on the global derivatives market has already dropped to the level it was last summer. The dependence of the ruble exchange rate on the cost of energy resources is recognized by all economists and analysts. As representatives of foreign banks interviewed by Reuters note, the Russian Central Bank is spending tens of billions of dollars both to maintain the ruble exchange rate and on anti-crisis measures. “Ultimately, they (the Russian authorities. - Ed. ) will be forced to devaluate. With such oil prices and such a situation in the credit market, the ruble is at the wrong level. Devaluation is a pill to swallow,” said Goldman Sachs managing director Rory MacFarquhar. Credit Suisse economist Sergei Voloboev predicts an expansion of fluctuations in the value of the bi-currency basket to 15-20% from the current 4% at the end of 2008 - beginning of 2009, which, with the euro exchange rate of about $1.29, will lead to a fall of the ruble against the dollar by 6- -8%, up to 28.5--29.1 rub. at the beginning of 2009.

Natalia ROMANOVA