Political crises in the ex-Soviet republics will throw the dollar up to 100 rubles
The Russian currency began the New Year with a sharp collapse. In just a few days, the “wooden” rate dropped to 77 rubles per dollar. The reason for this was the unrest in Kazakhstan, against the background of which international investors began to shift investments from the economies of the former Soviet republics to less risky financial instruments. Although ruble quotes rose slightly after Christmas, experts are confident that in 2022, Russians should prepare for new external and internal shocks, which risk a significant devaluation of national currency.
If on the eve of the New Year the market position of the Russian currency remained stable and a little more than 74 rubles was asked for the dollar, then during the Christmas holidays the exchange value of the “American” jumped above 77 rubles. The mass protests in Alma-Ata did not leave aside the quotes of the banknotes of our country, the rate of which fell to the level of last spring. After the suspension of the work of the National Bank of Kazakhstan, foreign investors began to refuse to invest in the economy of this state, which led to the sale of other risky exchange-traded assets, including those of Russian origin. For example, shares of Russian state-owned companies, including Gazprom, lost about 5% in price. By January 7, passions on the stock exchanges calmed down, and the Russian currency won back the fall, but the dollar rate still remains above the pre-New Year level.
According to Anton Orlov, director of the Institute for the Study of Contemporary Politics, the events in Kazakhstan have clearly demonstrated the unreliable potential of the Russian currency, which continues to significantly depend on the political situation in other countries with developing economies. The market environment reacts subtly to extreme incidents in regions unstable in terms of financial investments, reducing investor confidence in other adventurous exchange-traded instruments, the prices of which are correlated with each other.
Trade with Russia provides about 20% of Kazakh GDP – about $ 19-21 billion annually. “The further behavior of the ruble will be conditioned by the effectiveness of the CSTO’s actions, which in the eyes of the world community is gradually becoming a new“ center of power ”not only in the form of a paper projection, but also in real life. Much will depend on the negotiations between Moscow and Washington, and on the outcome of the Russia-NATO Council meeting, the expert believes.
Meanwhile, in addition to political upheavals in the border regions close to Russia, internal circumstances continue to exert serious pressure on the ruble. Economist Mikhail Khazin urged Russians to prepare for the devaluation of the national currency. As follows from the preliminary estimate of Rosstat, inflation at the end of last year reached a record for the past six years – 8.4%. In turn, the purchasing power of Russians in the first half of 2021 alone decreased in terms of the lion’s share of socially significant products. In this situation, the government is unlikely to benefit from a strong ruble, since most of the federal budget is supported by foreign exchange exports.
“The interest of officials is primarily in the execution of the budget parameters,” says Sergey Suverov, investment strategist of Arikapital Management Company. – The decline in purchasing power can be offset by regular social payments, which are supported by the most vulnerable segments of the population. The Russian currency is currently in time trouble: there is not enough time to resolve internal problems, and external circumstances do not tire of heating up the situation. The political situation in Kazakhstan is only a local reason for the New Year’s collapse of the national currency. We must not forget about the Ukrainian crisis, the escalation of which is capable of pushing the dollar above 100 rubles in the spring ”.
Newspaper headline:
Riots in Almaty brought down the ruble
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