Why is the ruble falling and will there be a default
The fall of the ruble worries everyone. Answers to the question of why the ruble is falling are sought by economists and ordinary citizens. It is believed that the reason for his rapid decline is the state of the oil market. The fall in oil prices automatically leads to a cheaper ruble. And further predictions of optimism do not add.
Nevertheless, experts on the further fate of the ruble disagree. Some experts are more optimistic and when asked why the ruble is falling, whether there will be a default, they say that the fall has reached its bottom and is unlikely to happen at the same speed any further. This opinion is shared by Andrei Kochetkov, an analyst at Otkritie Broker.
Experts, who believe that oil is the main factor influencing the state of the ruble, do not share these forecasts. And they are ready to give a negative answer to the question about the stabilization of the currency. Vladimir Pantyushin, strategist at Sberbank CIB, doubts that the ruble will be able to strengthen as long as oil prices fall down.
And if in the near future the Central Bank intervenes or the situation on the oil market does not stabilize, the ruble will remain unstable, with a tendency to fall. The question of why the ruble is falling today will sound even the next six months or a year.
The reasons for the fall of the ruble
Oil is one of the main factors underlying why the ruble is falling. Objectivity is such that more than half of Russia's budget revenues and almost 68% of exports are oil. Accordingly, the reduction in prices from $ 100 to $ 50 per barrel leads to the fact that Russia annually loses $ 180 billion, according to Maxim Oreshkin, director of the department of finance of the Finance Ministry. From here it becomes clear why the ruble is falling and the dollar is growing.
Fresh forecasts only reinforce this postulate. In the oil market began to increase proposals. This provoked an increase in the volume of oil on the international market, which led to its cheapening. And in connection with the lifting of sanctions on Iran, oil may fall in price by another 10 dollars.
This will be another reason why the ruble is falling - because with such a development of events, Russia will lose another 34 billion dollars. And this in turn leads to the fact that consumer prices in the country are rising - according to analysts,prices for many socially significant goods rose significantly.
Another reason is the decline in the Russian economy. According to experts, a possible increase in the discount rate of the US Federal Reserve in October will also be the reason why the ruble is falling and the dollar is growing.
The consequences of the fall of the ruble
The consequences of this situation are ambiguous. For the state, the weakening of the ruble is to some extent advantageous, since this to some extent compensates for the losses from the fall in oil prices for the budget. For him, the ruble price per barrel is ultimately more important. And the fall of the ruble, oil revenues remain at the right level.
Similarly, the weakening of the ruble is beneficial to the state from the point of view of the policy of import substitution, since then the products of Russian producers become more competitive in the domestic market. In this lies the secret, why the ruble is falling again, and the state is not taking decisive measures.
But there is a downside
The recession in the economy, which led to the loss of oil exporters, the financial difficulties of production related to imports, led to a budget deficit and lower tax collection.
For ordinary citizens of the country, all this is manifested in the growth of inflation and a decrease in real incomes due to the rise in price of products.From here it becomes clear that the questions of why the ruble is falling, whether there will be a default, seriously concern ordinary citizens.
In the future, everyone is concerned about the question - what will be done to stop the devaluation of the ruble. It is known that the mechanisms of influence on the exchange rate are in the hands of the Central Bank. In a critical situation, he is able to sell foreign currency reserves and enter the market, thereby strengthening the ruble. But while this option is not going to apply the Central Bank.
One of the reasons why the ruble is falling today is that the Central Bank intends to increase its reserves. Intervention from here is not included in his plans. Most likely, the Central Bank, as usual, will use the scheme of presenting money to banks.
And what about the financial market?
The Central Bank can artificially create demand for the ruble, supporting its liquidity, or raise key rates. But the latter measure is undesirable because it can adversely affect the already shaky economy of the country. The growth of interest rates for enterprises is destructive, they will not be able to develop. And this eventually eventually again becomes the reason why the ruble falls again.The policy of the Central Bank to reduce Klyuev rates remains unchanged.
Possible intervention by the Central Bank in the opinion of experts can be expected if the ruble exchange rate falls by several positions within a few days. Then the question of why the ruble falls will whether a default will require an immediate response.
What will affect the ruble exchange rate?
The Ministry of Finance may affect the rate by selling currency from the Reserve Fund. This method was applied in July, when $ 3.7 billion was sold to cover the budget deficit. This path can also be used when the question of why the ruble falls again begins to rise sharply before the state itself.
Summing up, it can be concluded that the Central Bank is likely to intervene only in a critical situation, when the dollar will cost more than 65 rubles. And then to the question why the ruble is falling and the dollar is growing, he will have to respond with actions on the market so that the next round of inflation does not start.