April 27, 2011, 00:11 / Finance

By the end of the year, the dollar may cost 24-25 rubles.

By the end of the year, the ruble may sharply strengthen to 24–25 rubles/$, according to the Ministry of Economic Development. The rate has not been at this level since September 2008. Ekaterina Kravchenko Olga Petrova

There are “risks of a strong strengthening of the ruble,” up to 24–25/$ by the end of this year or the beginning of next year, said Deputy Minister of Economic Development Andrei Klepach. He called this scenario likely if two conditions coincide: the price of oil remains at $115–120 and there is an influx of capital.

The last time the ruble was worth this much was at the end of September 2008. Since the beginning of the year, it has strengthened against the dollar by almost 8% to 27.9 rubles/$. The average annual forecast of the Ministry of Economic Development for 2011 is 28.4 rubles/$, in 2012–2013. – 27.9 rubles/$.

The basic forecast of the Ministry of Economic Development for oil prices – $105 – is lower than current ones. And Klepach believes that oil prices are unlikely to fall. Yesterday, a barrel of Urals oil cost $120.4, the average price since the beginning of the year is $106.03, the average rate is 28.92 rubles/$.

In November, the Central Bank in its monetary policy framework predicted capital inflows of $10–20 billion in 2011 with an oil price of $90. But since then the situation has worsened: in December the country lost $11.1 billion, in the fourth quarter - $21.5 billion. This year the trend continued: in the first quarter - minus $21.3 billion, but the outflow has slowed down. The Ministry of Economic Development expects zero capital inflow at the end of the year, Klepach said earlier. And Central Bank Chairman Sergei Ignatiev noted that “in the remaining months there will be either a zero balance or a small influx.”

Such a strengthening of the ruble will accelerate the current account balance going negative, Klepach states: “According to the base forecast <...> in 2014, and in this case the current account balance may become negative at the end of 2012 – beginning of 2013.”

The government needs a strong ruble to curb inflation, notes Vladimir Tikhomirov from Otkritie. The tactics of increasing real incomes of the population by strengthening the ruble are understandable for the election year, says Valery Mironov from the Development Center of the Higher School of Economics. But strengthening the ruble to pre-crisis levels will kill industry, he warns: “The recovery remains sluggish, and cheap imports will deal a crushing blow,” in which case the forecast of the Ministry of Economic Development (production growth of 5.4% in 2011) will not come true. The industry can adapt to a 5% strengthening of the exchange rate; the figures named by the Ministry of Economic Development will lead to stagnation, agrees Vladimir Salnikov from TsMAKP. By allowing an exchange rate of 24–25 rubles/$, officials may provoke an influx of speculative capital, warns Tikhomirov.

However, experts consider such a rapid strengthening of the ruble unlikely. According to calculations by the Development Center, the outflow in 2011 will be $24 billion. Even zero capital outflow looks like an over-optimistic scenario, notes Oleg Solntsev from TsMAKP; an outflow of $10 billion is more realistic.