The dollar exchange rate on the Moscow Exchange fell below 91 rubles for the first time since July 28
The Russian currency has continued to strengthen for several weeks, and at trading on Tuesday, November 14, the dollar fell below 91 rubles for the first time since the end of July. The exchange rate of the national currency is influenced by several factors: from the tax period to the recent presidential decree on the mandatory sale by exporters of the majority of foreign currency earnings.
Why is the ruble exchange rate rising?
During trading on Moscow Exchange The dollar exchange rate dropped below 91 rubles, this happened for the first time since July 28. At the same time, the euro was trading at 97.76 rubles, and the yuan dropped to 12.48 rubles. The dynamics of the Russian currency exchange rate are influenced by the tax period, and the decree of Russian President Vladimir Putin on the mandatory sale of most of the proceeds by exporters also played a significant role. According to the document, exporting companies from the closed list must transfer at least 80 percent of the currency to the accounts of Russian banks, and then sell 90 percent of the entire transferred volume on the market within two weeks.
However, as it became known, the presidential law forces businesses to imitate the process using the “circulation of rubles.” The point is that if a company conducts a transaction abroad for rubles, then it has to buy currency there in order to later sell it inside Russia. Businesses lose funds due to double conversion and face additional difficulties, especially when it comes to sanctioned companies that are limited in currency transactions.
The Kremlin promised to check this information and did not rule out that if, after checking, the relevant ministries confirm the problem, then the decree on the mandatory sale of foreign currency earnings could be adjusted.
Another factor in the strengthening of the ruble is the decision of the Russian Central Bank to tighten monetary policy: the regulator increased the key rate to 15 percent per annum. “The ruble exchange rate is affected by an increase in the key rate, which contributes to a decrease in household consumption and an increase in payments on loans with a floating rate from companies,” – confirmed Head of Financial Market Analytics and Premium Services at Gazprombank Investments Andrey Vanin.
The ruble exchange rate, in my opinion, is influenced, first of all, by fundamental factors related to our balance of payments, primarily by the increase in exports in terms of price indicators in general
How spoke Head of the Central Bank Elvira Nabiullina, the ruble exchange rate is strengthening against the backdrop of an improving trade balance, as well as due to an increase in the key rate. In addition, there is some stabilization of ruble demand for imports. This factor also makes ruble savings more attractive for economic entities in Russia.
To what values can the ruble exchange rate rise by the end of the year?
Experts have different opinions about what to expect for the Russian currency in the coming months. Most believe that the Russian currency will be located in the corridor from 90 to 95 rubles per dollar. Moreover, now much depends not so much on economic as on political factors, so analysts are not yet able to make more distant forecasts.
In particular, Director of the Federal Methodological Center for Financial Literacy, Associate Professor of the Department of Global Financial Markets and Fintech of the Russian Economic University. G.V. Plekhanov Denis Perepelitsa believes that the ruble will most likely remain within the range of 92-95 per dollar. He is of the opinion that further strengthening before the end of the year is unlikely. “The budget is formed in local currency, and exporters receive more revenue in it, because they sell dollars for more rubles and pay more taxes. For the budget, the strengthening of the ruble is a negative factor, so it is impossible to say that it will last indefinitely and the government will like it,” explained “Vedomosti” Director of the National Association of Financial Planners Andrey Paranich.
For his part, Freedom Finance Global analyst Vladimir Chernov, in a comment provided to Lenta.ru, indicated that the ruble is capable of taking the exchange rate to 80 when paired with the dollar.
The sale of foreign currency earnings provided for by the presidential decree is designed for six months. On this horizon, we see opportunities for the ruble to strengthen against the dollar to 80
At the same time, the expert added that a strong ruble may be disadvantageous for the government, since then federal budget revenues denominated in national currency will decrease, which is already running with a deficit this year. In general, Chernov noted, the presidential decree allows, as necessary, to adjust the volumes and timing of the sale of foreign currency earnings, which, accordingly, makes it possible to regulate the ruble exchange rate.
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