VTB Bank recorded an increase in foreign currency sales by customers. What this is connected with and what it can lead to, Izvestia found out together with experts.
The ruble is falling
On January 26, 2022, for the first time since November 2020, the euro exceeded 90 rubles, and the dollar – 80 rubles. The high exchange rate difference motivated VTB clients to sell foreign currency. The volume of exchange transactions, according to the bank, doubled in a few days on January 24-26.
According to VTB experts, the activity of currency holders is the current year’s trend towards converting savings into rubles, abandoning the dollar and a way to make money on the difference. In addition, the bank predicts a decrease in the volume of funds on foreign currency deposits by about 7%. Already, there has been a trend towards an increase in the number of ruble deposits by 3.9%.
The weakening of the ruble is most often associated with the geopolitical situation. One of the consequences of tensions in international relations is the reduction in the placement of Russia’s reserves in US currency from $118.9 billion to $96 billion as of June 31, 2021. According to Russian President Vladimir Putin, the United States is harming itself by its actions: many countries have reduced and continue to reduce their foreign exchange reserves in dollars. American politicians, however, are confident that nothing threatens the dollar’s position on the world market.
The year will be hectic
Against the background of the weakening of the ruble recorded over the past few days, information about the unusual behavior of bank customers indicates growing risks, believes Alexander Abramov, professor of the School of Finance, Faculty of Economic Sciences, Higher School of Economics.
— This means that the bank’s customers are alarmed by information about possible sanctions that may make it difficult to access foreign currency accounts and savings. Therefore, they are in a hurry to transfer these funds into rubles, the expert believes.
The Russians are acting adequately to the current situation, believes Artem Tuzov, executive director of the capital market department of IC UNIVER Capital.
– The currency has risen in price on geopolitics, not on the economy, and the strengthening of the ruble, after the politicians agree, looks likely.
According to the expert, the sale price does not seem too high.
– Over the past 2.5 years, the dollar has already exceeded the mark of even 80 rubles several times. Therefore, many simply sell the currency without a loss.
The analyst is cautious in forecasts: the world is too uncertain, not subject to economic laws.
“Politicians are far from completing negotiations. Therefore, we are in for a nervous year, with sharp jumps in the currency. Perhaps we will see an exchange rate exceeding 90 rubles per dollar. But closer to the middle of the year, the influence of policy on exchange rates should weaken, and the ruble against the dollar will begin to strengthen to the level of the end of 2021, i.e. 70–74 rubles, – concludes Tuzov.
Too early to draw conclusions
VTB data is not representative for assessing the situation in the country as a whole, says Ekaterina Kosareva, managing partner of the WMT Consult analytical agency.
– For analysis, we need data on foreign exchange transactions of at least the top 5-7 banks, including Sberbank. Then it will be possible to get an idea of the real situation with the massive sale of currency over the past few days.
According to the expert, the growth potential of the dollar may not be limited to 80 rubles.
– It is surprising that citizens ran to exchange offices immediately after the start of growth. I can assume that this is a delayed action: people have been wanting to exchange dollars or euros for a long time, and an opportunity has come up to make it more profitable than ever. Money could be needed for a major purchase, for transfer into rubles and placement at a favorable percentage.
The probable decrease in the volume of deposits in foreign currency looks logical.
– Banks offer very low rates on foreign currency deposits – from 0.05% in euros, up to 1% on average, and slightly higher – in dollars. This product is becoming less popular among those who really want to increase capital. Rather, people will prefer currency exchange instruments to banking ones: ETFs, European and dollar bonds, etc., Kosareva sums up.
Oil is gone
Since the beginning of 2022, the ruble has been showing one of the weakest dynamics among the currencies of developing countries, Alexander Potavin, an analyst at FG Finam, draws attention.
— Due to the increased geopolitical risks that have developed around Russia-USA-NATO relations, the exchange rate of the Russian currency has now moved away from fundamentally justified levels. And until the situation changes significantly, most likely, the weakness of the ruble exchange rate will continue, even despite the fact that Brent oil quotes have now exceeded $90 per barrel, which is the maximum since the fall of 2014.
According to the expert, the seasonality effect was superimposed on the situation.
— In recent years, the ruble exchange rate tends to weaken in January-February. In the spring, the ruble usually strengthens. But while there is no positive news from politicians and the military, one should not expect the Russian currency to significantly strengthen. It is hoped that the parties will eventually find peaceful ways to resolve problems.
Potavin is optimistic in his forecasts and believes that after a wave of devaluation of the ruble, a wave of its strengthening will certainly come.
– Those who need rubles for life right now or in the near future, convert the currency, taking advantage of the fact that the dollar and euro have grown significantly. But in general, the situation with Russian banks does not yet show outstanding volumes of currency exchange transactions, the expert concludes.
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