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Years of savings will turn into dust, as in the 1990s: a new wave of ruble devaluation
What will be the domestic exchange rate by the end of 2024?
Recently, there has been a tendency for the Russian national currency to weaken. According to Bloomberg, the government does not plan to take active measures to support the ruble exchange rate above 100 rubles per dollar. This is a significant change in approach compared to previous periods, when regulatory bodies were usually involved when approaching this level. This is reported by Kommersant.
Interestingly, the authorities now view the low ruble as a potential advantage in the context of a budget deficit. Recently, changes were made to the requirement for exporters to sell their foreign currency earnings, which is contrary to the generally accepted practice of tightening such measures when the value of the national currency falls sharply.
Experts disagree on the advisability of such a policy. Some analysts believe that deliberate devaluation of the ruble may be an ineffective way of financing the budget, as it may lead to increased inflation and, in turn, an increase in the government's spending obligations. Additionally, the strangeness of the situation is noted: despite a significant trade balance surplus, the national currency is weakening in conditions of restricted capital movement.
“If we talk about forecasts, it is expected that now there will be a period of adaptation, during which the extension of the terms of settlements for export trade will lead to a kind of forced outflow of capital, which could ultimately weaken the ruble to 3%,” says Alexander Isakov, chief economist for Russia at Bloomberg Economics.