What will happen to the ruble in the near future in 2020

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

The latest news in 2020 has long been full of forecasts about the options for quotations in the ruble / dollar and ruble / euro pairs. The opinions of experts, expressed 2 hours ago, provide another ground for thinking about what will happen in the near future with the exchange rates.

Coronavirus and oil - two prerequisites for the collapse of the ruble

Even before the opening of the Moscow Stock Exchange after the weekend dedicated to International Women's Day, several scenarios of what would happen to the ruble were circulated in the media. There are optimistic and pessimistic forecasts.

Let's consider the most likely ones, according to experts. Those who could not or did not want to take responsibility for the forecasts voiced made heavy comments, criticized, or looked for weak points in the logic of the arguments involved.

But everyone - pessimists and optimists alike - are sure that in the near future there is no reason to expect any special growth in the national currency of the Russian Federation.

N. Orlova, chief economist at Alfa-Bank, is confident that the key reasons for the degradation of the ruble lie in the coronavirus epidemic and the disruption of the oil deal. It was the second factor that caused the decrease in demand for fuel, as a result of which Russia had to support the next agreement to abandon the previous level of oil production.

As you know, the Russian Federation did not attend the meeting, and the signing of the agreements was disrupted. Optimists are confident that this is not an accident, since all previous declines were due to the increase in shale oil production by the United States.

In this version of the assumptions, it becomes clear both the appearance of allegations that the ruble was taken out of the oil strike, and the statement by the Russian president that the government and the Central Bank of the Russian Federation have the resources to maintain stability in the current difficult situation.

Expert Orlova is confident that the fall in oil prices cannot be long-term, and other factors will soon begin to act. However, her opinion boils down only to assessing two of them - the pandemic and the cost of oil.

The global financial market may feel that doping prices are beneficial to China's weakened economy and raise the cost to eliminate this possibility.

Nordea Bank specialists presented a review in which they argue that in the near future, the strengthening of the ruble may be facilitated not only by a decrease in the spread of coronavirus and an increase in oil prices, but also by other factors:

1. The sale by the Bank of Russia of foreign exchange on the market (2 hours ago it was announced that such measures are preemptive and could lead to stabilization of the foreign exchange market against the background of speculation).
2. The US Federal Reserve's interest rate cut in a week by as much as 50 points, and the ECU intends to announce a 10-point cut tomorrow.
3. The decision of the Central Bank of Russia on the key rate, this time - not about further reduction, but about growth for the attractiveness in the eyes of investors in the high-yield OFZ market.
4. A. Kochetkov, a leading analyst at Otkritie Broker, is confident that in many respects what will happen to the value of the ruble in the near future against the euro and the dollar will be solved by the panic that some financial structures and ordinary Russians are indulging in. Panic sell-offs in Europe and the US could threaten financial institutions.

Speculative sales of any assets that are considered risky affect not only the Russian currency, but also the value of commodity contracts, shares, and assets.

Three scenarios: analysts' opinion

In a generalized form, based on the different-vector opinions of experts, two hours ago, three variants of the probable outcome of events appeared. Of course, they do not answer specifically what will happen to the ruble in the near future and until the end of 2020, but nevertheless:

1. Optimistic (unlikely), based on assumptions about the lifting of sanctions, an increase in the cost of natural resources and an increase in Russia's GDP. A. Struchenevsky, chief economist of Sberbank, is leaning towards him. He is confident in the emotionality of the current market, and not that everything is based on correct calculations. The optimistic scenario assumes that the dollar is below 69, and the euro is in the region of 68 rubles.
2. The most probable one also proceeds from three preconditions in the presentation of forecasts of what will happen to the ruble in 2020. It is based on the stability of the Russian economy, modest increases in oil prices and the previous presence of imposed sanctions. Here fluctuations in the dollar are planned from 68 to 72 rubles, and the maximum rate of the euro - up to 79. A. Kochetkov, an analyst at Otkritie Broker, is inclined towards this option.
3. The pessimistic (for those who love the darkest forecasts) is based, like the opposite, optimistic, on unlikely events. It will be implemented if Russia's GDP falls rapidly, sanctions tighten to the point of complete isolation of the country from foreign markets, and the cost of oil falls to an extreme minimum. This option is being discussed by the opposition press.

President of the Russian Union of Entrepreneurs and Tenants A. Bunich is confident that the authorities will gradually weaken the ruble to the level of 70 per dollar. This confidence in the forecasts of what will happen to the ruble is based on a statement by V. Lepekhin, director of the EAEU Institute, who says that the weakening of the ruble will be associated with a drop in oil prices.

Two hours ago, it was suggested that the ruble would be held until the adoption of amendments to the Constitution on April 22. A counterbalance to this assumption can be considered the statement of the Minister of Finance Siluanov, who said that Russia will be able to finance all budget expenditures, even if low oil prices persist for the next four years.

Summarize

1. Forecasts of a fall or stabilization of the ruble depend on many circumstances, so there is no single answer.
2. It is not only the rise in oil prices and a slowdown in the global pandemic that can stabilize the situation.
3. The strengthening of the exchange rate may be associated (albeit indirectly) with the actions of other participants in the world market.
4. Exchange panic hit not only the Russian ruble.
5. Russia has additional reserve factors, which cannot be said about most other states.