A dollar for 100 rubles: experts called the conditions

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Geopolitics and the threat of sanctions affect the exchange rate of the national currency much more than expensive oil

Fundamental market factors that previously provided significant support to the Russian currency are gradually ceasing to operate. Oil quotes, which have reached local records, are not able, as before, to lead to an increase in the “wooden” rate. Moreover, according to experts, even the cost of a barrel of $100, which the world energy market may face in the very near future, is unlikely to serve as an incentive to strengthen the positions of domestic banknotes. Therefore, it cannot be ruled out that geopolitical tension and possible sanctions complications will soon drive the dollar higher than the “steward”.

The Russian stock market is preparing for the next seasonal swing. The accumulated problems in the geopolitical space are closely intertwined with world economic turmoil, which leads to not always predictable, and sometimes even absurd behavior of international stock speculators and investors. On the one hand, for the first time in eight years, prices for the Russian grade of Urals oil rose above $90 per barrel, exceeding the prices for Brent, the most popular North Sea blend among importers. At first glance, such dynamics should necessarily lead to the strengthening of the Russian currency, the cost position of which is largely supported by hydrocarbon factors. But nothing of the kind: dollar quotes have risen from 69 to 75 rubles over the past two months. In a number of cases, the cost of the “green” exceeded 80 rubles, which completely disproved the dependence of the “wooden” on the full house of raw materials on the exchanges.

According to Igor Nikolaev, Doctor of Economics, such inconsistency is explained by geopolitical overtones, which are now increasingly driving the behavior of international investors. “Vladimir Putin’s recent talks with French President Emmanuel Macron, which lasted more than five hours, brought a certain positive to the security of the European continent. Nevertheless, the main interests of investors still lie not in the political, but in the economic plane, ”the source of MK believes.

Moreover, energy resources in the foreseeable future will increasingly rarely provide the ruble with an opportunity to increase its weight on the stock exchanges. During the year, the market situation stabilizes, so the current energy prices, which, despite constant correction, fluctuate near the maximum historical values, may bring down the exchange rate dynamics of the ruble. In particular, the cost of “blue fuel”, the quotes of which rose seven times last year to a supernatural maximum of $ 2,000 per thousand cubic meters, will not return to the levels reached. “The combination of the expected recovery in Gazprom’s exports and increased volumes of LNG supplies, if the winter does not turn out to be protracted, can restore the filling level of European gas storage facilities to normal levels,” Finam analyst Sergey Kaufman is sure. – Prices for most energy resources in this case, by the end of the year will move from abnormal to simply elevated. Gas quotes may fall to $300-400 per thousand cubic meters.”

The cost of oil, on which the prices of Gazprom’s long-term contracts largely depend, is also unlikely to be constant. “Black gold” can test the level of $100 per “barrel”, after which the quotations of raw materials will decline. “The US Federal Reserve will not sit back and watch as rising oil prices fuel inflation. Therefore, this level is unlikely to be long-term,” predicts Valery Vaysberg, Director of the Analytical Department of IK Region.

In this regard, non-hydrocarbon factors come to the fore for the ruble. “Most foreign investors will closely monitor possible new sanctions against our economy,” continues Nikolaev. The most disastrous consequences for domestic financial institutions will be the ban on transactions in dollars, which continue to be a key instrument in international settlements. The search for workarounds, in particular, the gradual transition to national banknotes, for example, in contracts with China or Turkey, will require a long time, increased costs and additional risks, which are also inflationary in nature.

On the one hand, the most unpleasant sanctions scenario is unlikely. Washington is not able to fully control the SWIFT international payment system, disconnecting from which Russia will make it impossible, in particular, to pay for hydrocarbon supplies. The use of such weapons will lead to a surge in inflation in the United States, which in January accelerated to 7.5% and updated the maximum for a forty-year period. The American market went negative, which threatens to provoke a new global crisis. “It can be assumed that the White House will use the Russian proverb: “I will get frostbite to spite my mother.” However, this will not happen – the politicians of the United States can declare any threats, only for their implementation they will have to consult with financiers who are unlikely to give a positive signal, ”Nikolaev believes.

A rise in the dollar rate above 100 rubles, with the implementation of all the above measures, is possible, but unpromising for all parties. However, Russia is no longer worth relying on expensive oil, which can serve as a motivation for strengthening the ruble.

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