Historically, December is the worst month for the Russian currency. In the last weeks of the year, the ruble is constantly agitated by various events, which usually negatively affects its exchange rate. So this time, the “wooden” one runs the risk of being hit by a number of circumstances that could weaken its course: acceleration of inflation, unstable oil quotes, new COVID-19 mutations, aggravation of geopolitical relations with the United States. All of these factors give rise to concern about the near future of the ruble. How possible is a sharp collapse of its rate at the beginning of 2022, “MK” asked financial experts.
Fedor SIDOROV, Head of the School of Practical Investing:
“The ruble strengthens when the global financial market is calm and falls during a storm. If the situation on international stock exchanges stabilizes and a large-scale flight of investors from risky assets does not follow, this will support the Russian currency. In the event of a collapse of the capital market of the planet, the ruble exchange rate could fall sharply.
The position of investors will largely depend on the Fed, whose desire to tighten monetary policy and raise interest rates will lead to an outflow of investor funds from emerging markets into dollar-denominated assets. In fact, such a trend is already taking place – it is obvious for market participants that in conditions of high inflation, the regulator will have to end the period of low rates earlier than expected.
Another external determining factor for the ruble exchange rate will be the next package of financial and political sanctions from the United States. By the end of December, the United States should adopt a defense budget for 2022, which includes various proposals for sanctions against our country. The more extensive the restrictions are in this document, the stronger and more serious will be the consequences for our national currency. The geopolitical component adds fuel to the fire. The strengthening of negative rhetoric against Russia will also cause investors to leave Russian securities for American and European financial assets and contribute to the decline in the value of the ruble.
Oil quotes are still supporting, but not determining the rate of the Russian currency. Prices for raw materials in January are likely to remain at the level of $ 70-75 per barrel and will not rise higher. For replenishment of the National Welfare Fund and some stability of the “wooden” such quotations are quite enough. In turn, the Central Bank’s policy to raise the key rate will only provide short-term support to the ruble.
Thus, it turns out that there are two scenarios for determining the ruble exchange rate in January, almost entirely dependent on external factors. It is extremely difficult to predict how successful the situation will be. It is obvious that any aggravation will negatively affect the ruble – its value will decline against the dollar and the euro. It is quite possible that the dollar at the beginning of next year will rise in price to 80 rubles, and the euro will exceed 86 rubles (now about 83.5 rubles). A positive scenario for the ruble will happen in the absence of sanctions, calm in the markets and a decrease in the new wave of the pandemic. But this option, judging by the real development of events, can be considered unlikely. “
Alexander ROZMAN, senior analyst at Forex Optimum:
“Geopolitics and oil prices remain the main factors in the formation of the Russian currency. And since the dynamics of quotations of raw materials and geopolitical tracks are extremely variable processes, especially when it comes to Russia, when making a forecast for the ruble, you always have to have several scenarios for the development of events.
The first “basic” and most likely scenario is based on some certainty that emerged after the OPEC + meeting, and on the assumption that the meeting between Putin and Biden on December 7 will either de-escalate the situation on the Russian-Ukrainian border, or freeze tensions for the next several months.
In this scenario, oil prices until the end of January 2022 will remain within the framework of the structure created by the United States and OPEC +, where the American side is not satisfied with oil more than $ 72-73 per barrel, and OPEC + objects to quotations below $ 68. For the time being, the parties keep this range in order to avoid aggravating the conflict. If both conditions are met, the exchange rate in January will tend to 71-72 rubles per dollar.
In the second, “optimistic” scenario, oil prices will first gain a foothold at $ 73 due to force majeure in the Middle East or another factor, and by the end of December will rise to $ 77-80 per barrel. At the same time, geopolitical risks will sharply decrease after the meeting of the presidents of Russia and the United States, as it was after the June personal meeting of Biden and Putin. Then the rate of our currency by the end of January – beginning of February 2022 will slowly drift in the range of 68-70 rubles per dollar.
And finally, the third, “pessimistic” scenario. In it, oil prices due to the spread of Omicron and the actions of the United States will fall to $ 67-68, and in January – to $ 59-60 per barrel. As a result, even January, which should be the peak for the “wooden” one throughout 2022, will not be able to help the Russian currency to strengthen above 74 rubles per dollar.
If an aggravation on the Russian-Ukrainian border is added to the fall in oil prices in December-January, then there will be no talk of a strengthening of the ruble. In this case, the dollar will update the highs of 2020 in January-February, and we are unlikely to soon see the American currency cheaper than 75-76 rubles. “
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