Bloomberg: the dollar can go up to 97 rubles

March 17 2020 10

Recently from Goldman Sachs Bank сообщилиthat the Russian currency, dropping to the level of 75 rubles per dollar, is stabilizing, and within 2,5 years it will return to the level of 61 rubles per dollar. However, analysts at Bloomberg do not quite agree with this forecast, in their opinion, the Russian currency may drop to the level of 97 rubles per dollar.

In this case, the agency refers to its own analysis, according to which, collapse indices (quotes) on exchanges in the United States due to coronavirus infection 2019-nCov (COVID-19) may trigger a fall in the national currencies of other countries. This has already happened, for example, during the previous global crisis in 2007-2008. Therefore, the US dollar to the Russian ruble may grow by 30%.

According to analysts, the most vulnerable are the currencies of Chile, South Africa, Indonesia, India and Turkey. In these countries there is a significant deficit in the current account (balance sheet), and financial markets are virtually illiquid. So the fall in the currencies of these countries against the US dollar is very likely.

Although something like bloodshed has already happened in the currencies of emerging economies, there is scope for even greater losses.

- consider the agency.

We remind you that on March 16, 2020, the US Dow Jones stock index crashed by 3 thousand points (12,93%), to 20 917,53 points. This was the worst record since Black Monday 1987. Moreover, by the number of points lost, this day was the worst in the history of the Dow Jones.

It is possible that the market reacted to such a sharp drop after a statement by US President Donald Trump about a possible recession in the economy countries and his assumptions that the coronavirus epidemic will last until August 2020.

It should be added that the US Federal Reserve System (FRS) announced the zeroing of the base rate, and the US authorities started talking about a $ 800 billion anti-crisis plan.

At the same time, the key rate of the Central Bank of Russia for the period from February 10, 2020 to March 20, 2020, is 6% per annum, and the Russian government announced the allocation of 300 billion rubles for anti-crisis measures.

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123

+1

17 March 2020 17: 06

The ruble, of course, may fall, the government benefits from a depreciation, but the guesswork of "analysts" on the coffee grounds is not credible.

According to analysts, the most vulnerable are the currencies of Chile, South Africa, Indonesia, India and Turkey. In these countries there is a significant deficit in the current account (balance sheet), and financial markets are virtually illiquid. So, a fall in the currencies of these countries against the US dollar is very likely.

We listed 5 countries, indicated the reasons why their currencies could fall. Which of these reasons is suitable for Russia?
Significant current account (balance) deficit? We have a surplus and a decent stash.
Are financial markets virtually illiquid? The picture is reversed, nothing similar to the above is observed. The United States is more likely to have problems with the financial market, by the way, they also have deficits.
Then why is the ruble falling predicted?
They just feel like it. After all, it’s Russian and they should have problems, so they taught these analItikov. Kicks need to drive such specialists to the Canadian border.
1. Alexzn
  
  -1
  
  17 March 2020 22: 01
  
  You do not have basic economic knowledge. The ruble is falling for a simple reason - its tight connection with the price of oil. Revenues from oil exports to the budget decreased. The scheme, in which the budget can compensate for the reduction in foreign exchange earnings by depreciating the ruble, causes nothing but a smile. Hard times await Russia, as, indeed, the rest of the world, perhaps a little more because of the weakness of the economy and dependence on export of raw materials.
  1. 123
    
    +2
    
    18 March 2020 01: 57
    
    You do not have basic economic knowledge.
    
    What are you saying? Suppose you have them present?
    
    The ruble is falling for a simple reason - its tight connection with the price of oil.
    
    Buy a goose in the market and teach him the basics of economics. Unfortunately, charts are not uploaded to the site.
    According to the first link, the ruble exchange rate for 3 years:
    
    http://www.finmarket.ru/currency/rates/
    
    On the second link, the oil price for 3 years:
    
    http://www.oilru.com/dynamic.phtml
    
    If you find a direct relationship, write.
    
    The scheme, in which the budget can compensate for the reduction in foreign exchange earnings by depreciating the ruble, causes nothing but a smile.
    
    And the conclusions of the above "experts" do not make you smile? What makes you think that a decrease in the ruble exchange rate can compensate for foreign exchange earnings? There will indeed be less currency, but in Russia, if you have forgotten, they use the ruble and a decrease in its exchange rate will make it easier for the government to execute the budget.
    
    Hard times await Russia, as, indeed, the rest of the world, perhaps a little more because of the weakness of the economy and dependence on export of raw materials.
    
    And where did you get the idea that Russia has a weak economy? The whole world is in for hard times. First, do you think that only Russia depends on the export of raw materials? Are Saudi Arabia, UAE, Qatar, Iran, Venezuela, Norway, Algeria less dependent on oil exports? Or is "the whole world" concentrated between Mexico and Canada for you? Secondly, stagnation will begin in all countries, I doubt that the situation, for example, in Japan will be better. Or do you think that the decline in demand will affect only raw materials, while Japan will keep the volume of exports at the same level? Third, it matters how prepared countries are for the coming tests. At the moment, Russia has a surplus budget, low external debt and a decent amount in the NWF. What can not be said about the territory that you consider "the whole world". So your pessimism has little real justification. In the stock markets, serious changes, in my opinion, will soon see the purchase of assets that have fallen in price, in fact, nationalization.
    1. Alexzn
      
      -1
      
      19 March 2020 16: 40
      
      12 years of teaching "economics" at the university gives reason to think so. Graphs for 3 years of the relationship between the ruble and the dollar in favor of the poor (naive). Allegedly, there is no direct connection, or rather, it did not exist before force majeure. Any economy related to raw materials largely pegs the exchange rate of its currency to the prices of exported raw materials. Russia, as a relatively stable economy, was able to get away from direct dependence in the corridor of price changes up to 5%, maximum 10%, beyond these limits the ruble again turns into a function of the oil price. What we see.
      I would be grateful if they explain to me why the ruble has fallen in price by 25%, not being associated with a drop in oil prices. Maybe someone sneezed so much in Moscow?
      1. 123
        
        +1
        
        19 March 2020 18: 09
        
        12 years of teaching "economics" at the university gives reason to think so.
        
        To learn something and be able to do it in practice is not always the same thing.
        
        Charts for 3 years of connection between the ruble exchange rate and the dollar price in favor of the poor (naive).
        
        If facts contradict theory, how much worse for facts? Quote from the website of the Ministry of Economic Development of the Russian Federation:
        
        In the face of a slowdown in global growth, the average annual price of Urals oil in 2019 fell to $ 63,8 per barrel after $ 70,0 per barrel in 2018.
        
        The average annual ruble exchange rate was 64,7 rubles per US dollar (after 62,5 in 2018).
        At the same time, during the year, the tendency to strengthen the Russian currency was observed: by December 2019, the ruble appreciated by 7,5% compared to the corresponding month of the previous year and became one of the leaders among the currencies of emerging markets.
        
        http://www.ved.gov.ru/monitoring/foreign_trade_statistics/monthly
        
        There is allegedly no direct connection, or rather, it was not before the force majeure.
        
        If there is no direct link, then what about the "tight link with the oil price"?
        
        Any economy associated with raw materials, to a large extent, links its currency to the prices of exported raw materials.
        
        A reasonable comment, but, as you can see, there is no hard binding. Therefore, not all factors were taken into account. Perhaps you are simplifying a little? Firstly, oil revenues do not directly affect the ruble exchange rate; anything over $ 40 is automatically withdrawn to the NWF and practically does not affect the economy. Secondly, it is difficult to call the economy fully raw materials, "non-primary" sectors are developing, but this is not so noticeable, because the export of raw materials is often growing at an even faster pace. Therefore, the share of non-primary exports is almost not decreasing, but at the same time dependence on imports is falling, not everyone pays attention to this.
        By the way, if you follow your logic, the currency of the economy, which is a consumer of raw materials, should grow by about the same percentage. But if we look at the Euro, we will see that this does not happen. The graph does not load on the site, only the link).
        
        http://www.cbr.ru/hd_base/micex_doc/?UniDbQuery.Posted=True&UniDbQuery.FromDate
        
        Russia, as a relatively stable economy, was able to get away from direct dependence in the corridor of price changes up to 5%, a maximum of 10%, beyond this framework, the ruble again turns into a function of oil prices. What we see.
        
        Already progress. You see, we've already gone from a "weak" to a "relatively stable" economy. Perhaps the answer is in the very 7,5% for which the ruble appreciated in 2019, despite the decline in oil prices. I suppose that the "bias" towards the resource-based economy decreases by about that much in a year.
        
        I would be grateful if they explain to me why the ruble has fallen in price by 25%, not being associated with a drop in oil prices. Maybe someone sneezed so much in Moscow?
        
        There are several reasons. First, the coronavirus factor cannot be discounted. Although its scale in Russia is relatively small (if I am not mistaken, there are about 150 identified cases that have not died from this disease yet, one infected woman has died, but the cause of death is not a virus), the impact on the economy is much stronger. The need for the same raw materials is sharply reduced, the world economy is slowing down. Plus delays in the delivery of components from China. Secondly, this is, of course, a "price war", I did not look at exchange rates, but I believe that the Saudi riyal did not suffer much, it is tied to the dollar, and the impact on its exchange rate is minimal. Added to this is the categorical unwillingness to maintain the current ruble exchange rate. This is beneficial for the government, because budget execution is greatly facilitated, the low exchange rate stimulates the transfer of production to the territory of the country, and this is what they have been doing in recent years. Well, and the price of shares is still decreasing, companies that have fallen in price will be buying up, as in 2008.
        
        Alexzn
        
        0
        
        19 March 2020 23: 16
        
        Can the economy of the country be considered quite stable if it has been showing, if not negative growth indicators, indicators below the world average for 12 years? If in the oil war initiated by Russia itself (a world power), did its currency simply collapse?
        And, once again, the depreciation of the ruble does NOT make it easier for the government to implement the budget. At best, it eases the illusion of budget execution by the money supply, the commodity content of which has declined sharply. The depreciation of the ruble may to some extent, could facilitate the implementation of the budget in the absence of imports, but it is present.
        The independence of the ruble from the price of oil is conditional and not very noticeable up to the very 40 rubles laid down in the budget, but it is there, it is simply masked by its multifactorial nature and time lag.
        
        123
        
        +2
        
        20 March 2020 00: 31
        
        Can the economy of the country be considered quite stable if it has been showing, if not negative growth indicators, indicators below the world average for 12 years?
        
        Why not? The leaders in terms of economic growth, if not mistaken, Libya with Eritrea. You can compare with Germany, I think it’s not very different, though the comparison is not entirely correct, the largest economies in the world aren’t spoiling it, they aren’t inventing any sanctions.
        
        If in the oil war initiated by Russia itself (a world power), did its currency simply collapse?
        
        Firstly, is it not a fact that Russia itself, and secondly, has collapsed so much? We have already seen all sorts of collapse. I’m not worried here at all, what is bothering you so much?
        
        And, once again, the depreciation of the ruble does NOT make it easier for the government to implement the budget. At best, it eases the illusion of budget execution by the money supply, the commodity content of which has declined sharply. The depreciation of the ruble may to some extent, could facilitate the implementation of the budget in the absence of imports, but it is present.
        
        In the structure of imports, 44% are machinery and equipment, 19% chemistry. These groups of goods have an indirect relation to budget execution. The budget surplus is about 1,5% of GDP. Well, the budget will become scarce, what's wrong? In other countries, this is in the order of things. Revenues from exports will decrease, they will cease to add up to the NWF, they will start taking from there, and for this it was created. I don’t see problems with budget execution.
        
        The independence of the ruble from the price of oil is conditional and not very noticeable up to the very 40 rubles laid down in the budget, but it is there, it is simply masked by its multifactorial nature and time lag.
        
        I don't know how she manages to disguise herself, but she does well. I guess the time offset is also not constant? Do you have any specific data? And how you managed to determine the time lag is a mystery to me. What do you mean by "multifactoriality" is all the more incomprehensible. If the exchange rate is influenced by a combination of factors, and even there is a hypothetical time lag, then there is no reason to talk about the rigid dependence of the ruble on the price of oil.
        
        Alexzn
        
        -1
        
        20 March 2020 10: 10
        
        Explanation - WHY the ruble and the Russian economy have problems, they do not cancel out the presence of these problems.
        The ruble’s volatility is a fact, and a 25-30% fall in the exchange rate should not be called a collapse ... your right, but you are not convincing.
        You can pretend that budget execution at 60 rubles / dollar and 82 rubles / dollar is the same thing, but ...
        
        123
        
        +1
        
        20 March 2020 13: 55
        
        Explanation - WHY the ruble and the Russian economy have problems, they do not cancel out the presence of these problems.
        The ruble’s volatility is a fact, and a 25-30% fall in the exchange rate should not be called a collapse ... your right, but you are not convincing.
        You can pretend that budget execution at 60 rubles / dollar and 82 rubles / dollar is the same thing, but ...
        
        Firstly, I did not say that there are no problems with the ruble exchange rate, but I do not see a catastrophe in this. I believe the process is manageable.
        The budget will be executed at a rate of 100.
        In addition to the significant BUTI don’t see the arguments.
        I don’t take into account the rugged dependence of the ruble on oil prices like an invisible gopher, because it is so invisible that even a person who taught economics cannot really show it.
        I believe that you in vain consider the leadership of Russia short-sighted, and their actions are spontaneous and not thought out.
        The collapse of prices is a compulsory and necessary measure. In the current situation it is quite justified. The higher price level allowed America to extract more expensive oil and, using outright unscrupulous pressure, to oust Russia from the market. Europe was offered its more expensive hydrocarbons with "molecules of freedom" that made its economy uncompetitive, now America was offered to taste its own cooked dish. So let's see how strong her stomach is, whether she is ready to work at a loss for years for the sake of the ideals of democracy.
Alexzn

-1

20 March 2020 16: 29

Quote: 123
Explanation - WHY the ruble and the Russian economy have problems, they do not cancel out the presence of these problems.
Ruble volatility is a fact, and a 25-30% fall in the exchange rate should not be called a collapse ... Your right, but you are not convincing to realize it.
You can pretend that budget execution at 60 rubles / dollar and 82 rubles / dollar is the same thing, but ...

Firstly, I did not say that there are no problems with the ruble exchange rate, but I do not see a catastrophe in this. I believe the process is manageable.
The budget will be executed at a rate of 100.
In addition to the significant BUTI don’t see the arguments.
I don’t take into account the invisible gopher - the tough dependence of the ruble on oil prices, because it is so invisible that even a person who taught economics cannot really show it.
I believe that you in vain consider the leadership of Russia short-sighted, and their actions are spontaneous and not thought out.
The collapse of prices is a compulsory and necessary measure. In the current situation it is quite justified. The higher price level allowed America to extract more expensive oil and, using outright unprincipled pressure, to oust Russia from the market. Europe was offered its more expensive hydrocarbons with "molecules of freedom" that made its economy uncompetitive; now America was offered to taste a dish prepared by itself. So let's see how strong her stomach is, whether she is ready to work at a loss for years for the sake of the ideals of democracy.

I categorically disagree with the correctness of the oil war. Time will tell. Previous wars with shale oil showed the inability to wage price wars and even a complete misunderstanding of the situation by Putin (remember the pearl of about $ 75 for oil, which will lead to the collapse of the world economy?). So far, I have no reason to believe that this time the strategy of the Russian leadership will be winning.