The ruble will be saved at the expense of state employees and pensioners

The author is a writer, publicist Elena Kotova, who previously worked at the IMF, the World Bank, built an investment business at VEB and VTB, and represented Russia on the board of directors of the European Bank for Reconstruction and Development.

What's happening to the ruble?

The ruble has fallen by 11% against the dollar over the past month. The government supports the dollar exchange rate through foreign exchange interventions of the Central Bank and assures that within the established currency corridor, the upper ceiling of which is 38 rubles 15 kopecks, maintaining the ruble exchange rate is a solvable issue. It seems true, this limit is still far away.

The government calls on people not to panic, not to speculate, and not to storm exchange offices where there are already interruptions in the supply of dollars. Numerous experts comment on this situation from morning to evening and wisely tell us how we can divide our savings into different currencies so as not to concentrate everything in the ruble. This doesn’t fit well with the government’s statements, because 38 rubles per dollar at the upper limit of the currency corridor, 34 rubles that we had yesterday, and 33.5 today, with the volume of savings that the average Russian has, is not the topic for sorting out different financial instruments, especially since for this you will have to speculate and storm exchangers.

In other words, assessments are contradictory because they are deceitful.

Where should you keep your savings?

Of course, today it is better to divide your savings into different currencies. One smart guy on some website urged people not to get carried away with exotic currencies, but included the British pound among them, which is not exotic at all. The pound is very strong.

In addition, everyone is calling not to invest in the euro, because there is a crisis in Europe. This is absolutely wrong. The crisis in the Eurozone is a separate issue and has nothing to do with the fall of the ruble; the euro will strengthen against the ruble in the next 3-4 months.

Those who have ruble debt are terribly lucky. For people who have consumer or mortgage loans in rubles, the situation with the exchange rate will be beneficial if they have some non-ruble sources of income or non-ruble savings.

How will exchange rate fluctuations affect the wallets of Russians?

All this is just a piece of ice from the tip of the iceberg, which is barely visible from the water, because most Russians have savings in rubles not worth millions of dollars, but a couple of thousand or tens of thousands, so their safety and growth is far from the first factor that determines their standard of living. The standard of living is determined solely by employment stability, salary stability and price stability. Savings are in tenth place. Every Russian receives a salary in rubles and pays for utilities with the same rubles, and, it would seem, what does he care about these fluctuations? Unfortunately, the current situation with the ruble is affecting the living standards of Russians in a number of ways.

Over the past month, the ruble has fallen in price by 11%, over the year - from 27.5 to 33.5 rubles per dollar, that is, by 22%. A drop of such colossal size is a hidden devaluation, which no one was going to talk about before the presidential elections.

Slowly but surely, Dutch butter, Australian beef, writing paper, office equipment, children's markers, diapers are becoming more expensive in rubles... Most of our vital consumer goods are imported. This doesn't just hit your wallet, it hits you hard.

Let’s say the state will withhold utility tariffs by law. Let's say our meters, taps and batteries are Russian, but the trucks on which they are delivered are imported. If so, then utility costs will still increase. To maintain tariffs, they will either have to be subsidized from the budget, or there will be interruptions in hot water.

What are the reasons for exchange rate fluctuations?

The ruble is supported by foreign exchange interventions. During this month, the Central Bank sold foreign exchange reserves worth more than $10 billion. The level of reserves now stands at 513 billion rubles - that is, almost a two-month minimum. And outside the window there is a global economic crisis, and this is the main reason.

Is the current situation similar to the second wave of the global economic crisis?

It is believed that the crisis ended in 2009, but in fact it did not end, but was replaced by a couple of years of shaky balance. Since August 2011, first stealthily, and now in full force, the crisis entered its second phase. It just seems that if the ruble exchange rate creeps down, exporters who receive more rubles receive more. Our exporters are mainly raw materials, and sales volumes and prices for raw materials are also falling. Brent has fallen, all indices are collapsing on the London Metal Exchange, so even commodity exporters have begun to cut costs and close projects. What can we say about importers: an increase in their costs will first be expressed in a jump in prices, and then will come up against a lack of demand. Both will have to start cutting jobs. The government will punish layoffs severely, so companies will have to maintain employment one way or another. Hidden unemployment will arise, therefore it will be possible to maintain employment only due to the fact that wages will be paid in the depreciating ruble and with huge interruptions. Now disruptions have begun in the province. For example, in the Oryol region, salaries are paid once every three months.

As with many other things, for the sake of simplicity, the ups and downs of our ruble are blamed on external factors - the euro crisis in Europe, the decline in economic growth in the USA and China, and we all suffer from this. This is a half-truth. Any half-truth is more likely to be a lie. Yes, it is a global crisis. But unlike other developed countries, our field of maneuver for mitigating the consequences of the crisis for Russians is tiny. We do not have sources of budget revenue comparable in scale to oil and gas, which are the main targets of the crisis. We have nothing to support the ruble except for currency interventions. Therefore, we will cut the budget: freeze salaries for public sector employees, pensions, road construction, and health care development. We will cut to the quick, and not manipulate, like most developed economies, the balance of payments, trade balance, regulation of import duties, stimulation of exports and restructuring of external loans. We simply do not have such a maneuver.

In fact, not everything is as scary as it seems, because we have been living like this for 20 years. We just got used to it. Now we are paying in rubles for promises: to modernize, diversify the economy, close unprofitable enterprises, retrain unnecessary working people.