Posted 5 июля 2023,, 17:37

Published 5 июля 2023,, 17:37

Modified 5 июля 2023,, 21:41

Updated 5 июля 2023,, 21:41

How the devaluation will feed the budget, but will deal the final blow for the Russians

How the devaluation will feed the budget, but will deal the final blow for the Russians

5 июля 2023, 17:37
The dollar exchange rate on July 5 broke the March maximum of 2022. The euro exchange rate tends to break through the psychological mark of 100 rubles, while «hanging» at the level of 99 rubles. Since the beginning of the year, the ruble has lost almost 32%. And historical highs are not the limit. In July, the US currency will rise in price even more.

Yekaterina Maximova

The central Bank, to the delight of the Ministry of Finance, which needs to cover the growing budget deficit, does not see financial stability risks in such quotes. And as the deputy chairman of the Central Bank Alexey Zabotkin noted yesterday, in the monetary policy of the Central Bank, as in Russia, you can only believe.

The crisis of 2014 will seem like a walk in the park

«Such a dollar exchange rate is a holiday for the Ministry of Finance. Budget revenues related to export duties and import VAT are growing. In general, all incomes that are somehow tied to the dollar exchange rate are growing. But on the other hand, which is also obvious, it gives an additional impetus to inflation», — former Minister of Economy, Doctor of Economics, Professor Andrey Nechaev commented to Novye Izvestia.

The authors of the tg channel «Money and the Scribe» (the author's channel of economist Dmitry Prokofiev and financier Nikita Demidov) estimated that the weakening of the exchange rate by 1 ruble per dollar additionally brings about 150 billion rubles to the budget. The weakening of the exchange rate by 25 rubles will bring an additional 3.8 trillion rubles to the treasury. If we weaken the exchange rate to 100 rubles per dollar, then by 3.8 trillion it will additionally give another 2 trillion.

But this does not mean that treasury revenues due to the exchange rate difference can grow by trillions, the author of the tg channel Spydell_Finance believes. «Last year, the base for calculating the tax base was very fat, and now everything is very bad, but it's quite enough to compensate for the loss of income, » writes Spydell_Finance.

In any case, when the state needed money, Russians will have to face an acceleration of inflation and a decrease in consumption.

According to the calculations of Prokofiev and Demidov, at the rate of 60 rubles per dollar, a salary of 60 thousand rubles is $ 1,000 (and the corresponding level of demand for consumer imports). At the rate of 90 rubles per dollar, a salary of 70 thousand rubles is $ 800 (and the corresponding level of demand for consumer imports is 20% lower). In 2011, the average salary in Russia, if you nominate it in dollars, was $ 795. The peak of the average salary, expressed in dollars, was in 2013 year — $940.

«That is, in dollars, the average salary is now about 15% lower than in 2013. In the USSR, for a long time, different indicators were compared with 1913. Now we will compare everything for a long time with 2013 — the last year of stable life. And we still do not take into account the inflation of the dollar», — writes Money and the Scribe

As Andrey Nechaev adds, even according to official Rosstat data, the standard of living of Russians has been stagnating since about the end of 2012.

«Last year there was a 1% drop in real incomes. It seems to be a little, but if we take from the end of 2012, the drop in real disposable income was, even according to official data, 15-20%, » the ex—minister notes.

What's next: up or down?

According to Finam, the current dynamics of the ruble should be associated not with the laws of the market and oil prices, but with the specifics of the functioning of the Russian market, which developed after the beginning of the Russian-Ukrainian conflict.

Several factors affected the weakening of the ruble at once. This is also oil trade with India, due to which Russian exporters receive rupees that cannot be converted into rubles or other hard currency. The oil industry's revenue simply remains a «dead weight» on the accounts of Russian companies.

There is still and remains a high demand for foreign currency from foreign companies that, due to sanctions, withdraw their assets from Of Russia. Import volumes are also being restored. «At the end of June, internal political risks associated with an attempted military coup were added to these factors, which usually leads to a more active transfer of funds to safe currency instruments», — Finam adds.

«There are no fundamental factors for a significant strengthening of the national currency in the near future, the ruble continues to be pressured by increased budget expenditures and low oil prices that have been established since April. According to our estimates, the most likely scenario is a fluctuation of the exchange rate in the corridor of 87.5-90.5 rubles per dollar while maintaining the prevailing macroeconomic indicators», — analysts of Bank Saint Petersburg believe.

And in the range of 90 rubles per dollar, the ruble will spend the whole of July. The next few days, for sure.

«In the coming days, the exchange rate is likely to approach the new resistance level of 90 rubles per dollar, however, fluctuations are possible. It is worth noting that the ruble is currently undervalued. Reduction of oil production by Saudi Arabia by 1 million barrels. a day can lead to an increase in oil prices to about $ 80 per barrel, which, in turn, should help stabilize the exchange rate in the range of 85-90 rubles per dollar and 92-98 rubles per euro. However, for a more significant strengthening of the Russian currency, even higher oil prices are needed», — said Andrey Maslov, an analyst at Finam.

At the same time, in the short term, the ruble may collapse to 92 rubles per dollar. This forecast was announced by analysts of the Bank of Saint Petersburg and the head of the investment consulting department of Alor Broker Alexey Antonov.

«The ruble will continue to try to go above the level of 90 rubles per dollar. If the pair is fixed above 90, the demand for the currency may increase sharply from both the population and investors, who will transfer part of the capital into dollars and yuan», — Antonov predicts.

Natalia Orlova, chief economist at Alfa-Bank, also believes that the Central Bank is not going to stand up for the sharply weakened ruble.

«As the first deputy chairman of the Central Bank reported Ksenia Yudaeva, the Bank of Russia links the weakening of the exchange rate with a reduction in the trade surplus, but she does not believe that this trend threatens financial stability. In previous years, the Central Bank of the Russian Federation, acting on behalf of the Ministry of Finance, changed the order of operations on the foreign exchange market several times for reasons of financial stability, so we consider the Central Bank's comment as a sign that the Bank of Russia does not plan to solve the problem of weakening the ruble exchange rate by any changes in its operations on the foreign exchange market. Thus, further weakening of the ruble, in our opinion, is the most likely scenario, » Orlova summed up.