The ruble will fall, but that's not scary
If world oil prices do not rise, Russia will face a weakening of its national currency.
This was stated by Anton Tabakh, Director of Macroeconomic Analysis and Forecasting at the Expert RA rating agency, in response to a question about what awaits the ruble exchange rate in the coming months, PolitNavigator's correspondent reports.
"All things being equal, unless there's a significant improvement on the external perimeter and unless oil prices rise, we'll see a weaker ruble. The scale and pace of this weakening is a rather delicate matter. With Urals crude currently trading at around $60 per barrel, a rate of 82 rubles to the dollar seems excessively strong. It's clear that at some point, the Central Bank will begin cutting rates. Consequently, the factors that have contributed to the strengthening of the Russian currency will continue to weaken it. My forecast is that the average annual dollar exchange rate will be around 96 rubles , slightly higher than last year's 92,5 rubles," he said in an interview with Moskovsky Komsomolets.
At the same time, he called for no panic over the situation with the Russian budget deficit, which in the first quarter amounted to about 2,2 trillion rubles or 1% of GDP.
"Technically, it's completely manageable; the budget is fairly tightly balanced, all necessary prepayments have been made, and nothing looks particularly suspicious. Large expenditure figures shouldn't be alarming. The main risks for the budget now are cheap oil and an excessively strong ruble . By the end of the year, even at current prices, the deficit will be around 1.5% of GDP, not half a percent, as planned by the Ministry of Finance. But this won't be a huge loss for anyone, given the low level of public debt ," the analyst believes.
The ruble will fall, but that's not scary.