One hundred to one

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During trading on the Moscow Exchange on July 6, the Russian currency updated its lows since April 2022. The euro exchange rate at its peak was 102 rubles, the US dollar - 93.85 rubles. The "friendly" Chinese yuan reached a maximum since April 14, 2022 - 12.92 rubles, the Hong Kong dollar - 11.73 rubles. The new fall comes in part despite macroeconomic factors that should have supported the Russian currency. The Organization of the Petroleum Exporting Countries (OPEC), together with Russia, announced a reduction in oil production, which should have had a positive impact on oil prices and supported, among other things, the Russian currency.

Moreover, the Russian authorities recently announced a reduction in oil exports by an additional 500 thousand barrels per day, which, apparently, according to the idea of the Russian authorities, was supposed to lead to an increase in oil prices and reduce the discount on Russian oil. However, the effect turned out to be short-lived: quotes of the North Sea Brent oil were stuck in the range of 72-78 dollars per barrel, a similar picture with the American grade WTI , which has been trading between 67 and 74 dollars per barrel since May.

Echoes of bans and "parallel imports"

Nevertheless, several fundamental factors are in favor of the fall of the ruble. First of all, this is the trade balance - the difference between imports and exports. The reduction in oil and gas exports led to a decrease in the receipts of the currency of "unfriendly" countries, while the demand for imports did not decrease, which logically leads to an increased demand for a scarce currency. This fundamental reason is also spoken about in the Russian Central Bank.

“We define the main factors in the same way as before - this is the trade balance. A couple of days ago, data on the balance of payments were published, we see a significant reduction in the current balance compared to last year, ” said Ksenia Yudaeva, First Deputy Chairman of the Central Bank.

Additional pressure on the Russian currency is exerted by foreign companies that are still trying to leave the Russian market. In the fall of 2022, the Russian authorities made it much more difficult for companies to leave “unfriendly” countries. Now this requires special permission from a special government commission that can block any sale.

In such circumstances, negotiations with the authorities are very difficult and require long-term coordination. At the same time, non-residents sell their assets for foreign currency, which creates additional pressure on the foreign exchange market, which, after the imposition of sanctions, suffers from a shortage of foreign currency. Each such transaction significantly affects currency fluctuations - that is, leads to a fall in the ruble.

RF Central Loafer

Some experts attribute since September 2022 the new round of the ruble’s fall, among other things, to the inaction of the Bank of Russia, which has not changed the key rate , although the conditions within the financial system have changed significantly. For almost a year, the key rate has been at the level of 7.5%, which is only slightly higher than in developed countries: in the USA it is at the level of 5.25%, and in the eurozone - 4%. The current level of the rate is at a low enough level to increase the inflow of imports, increase the demand for foreign currency and thus only put more pressure on the ruble exchange rate.

problems in the fall of the ruble The head of the regulator, Elvira Nabiullina , sees no , moreover, the head of the Central Bank insists that the floating rate is good for the Russian economy. “The floating rate, yes, it changes under the influence of foreign trade, we have tools to smooth out short-term fluctuations. But a floating exchange rate, in our opinion, is a blessing that allows external changes, external shocks to be more easily absorbed in the economy,” Nabiullina said during her speech at the financial congress “Structural Transformation of the Economy and Financial Markets”.

Some experts see this as a signal for the upcoming tightening of monetary policy - raising the rate - as well as for verbal interventions (deliberately harsh statements in order to get the desired result from the market with the help of words and reduce the appetites of stock speculators) .

Also among the possible reasons for the decline in the ruble, experts name the recent rebellion of Yevgeny Prigozhin , who forced investors to sell assets and withdraw them abroad, and the announced reduction in sales of foreign currency from the National Welfare Fund, which supported the ruble in previous months.

For the Russian state, the collapse of the ruble is really a boon. The budget for 2023 is still running with a record deficit: the costs of the war are forcing the authorities to look for secondary budget items that can be cut. The fall of the ruble reduces the pressure on the Russian budget and allows the Russian authorities to partially stabilize spending.

In May 2022, Russian President Vladimir Putin boasted called of the “shrinking” of the dollar and the record strengthening of the ruble, but the “shrinking” did not last long, already in the fall of 2022, the Russian authorities the exchange rate in the region of 70-80 rubles per dollar “comfortable”. In the conditions of 2023, this bar may be slightly higher.

One hundred to one

The Russian currency went down again. The euro exchange rate exceeded 100 rubles

Echoes of bans and "parallel imports"

RF Central Loafer