The dollar at 150 rubles, the euro - even higher: the collapse began on the foreign exchange market

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The dollar at 150 rubles, the euro - even higher: the collapse began on the foreign exchange market
The dollar at 150 rubles, the euro - even higher: the collapse began on the foreign exchange market
28 February, 09:20Economy
Tinkoff Bank offers Russians to buy the dollar for 153 rubles, and the euro - for 164 rubles. The sale price is 89 rubles and 101 rubles, respectively.

The dollar exchange rate in large state-owned banks on Sunday exceeded 100 rubles, although at the close of trading on the Moscow Exchange on Friday it was 83 rubles.

VTB, which fell under US blocking sanctions, sells the American currency at 105 rubles, and buys at 78.

In Promsvyazbank, the dollar costs 132.67 rubles when buying and 72.67 rubles when selling.

Otkritie sells a dollar at 115 rubles and buys at 80 rubles. Sber keeps the rate at around 99.49 rubles for the purchase and 84.92 rubles for the sale.

It is no longer possible to buy euros cheaper than 100 rubles in large banks. In Sberbank, the rate is 110.49 rubles, in VTB - 115 rubles, in Otkritie - 120 rubles, in PSB - 143.07 rubles.

The Iranian-level sanctions imposed on Russian gold reserves are an unprecedented case for an economy of such a scale as Russia's.

“On Monday, a catastrophe will occur on the Russian currency market. I think they will stop trading and the rate will be fixed at an artificial level, like in Soviet times,” says Sergey Aleksashenko, former deputy chairman of the Central Bank of the Russian Federation and now a senior fellow at the Brookings Institution.

The foreign exchange market in Russia in its current form may simply cease to exist. "This will mean only one thing - complete currency control, as in the USSR", - said Oleg Abelev, head of the analytical department of IC Ricom-Trust.

As of February 1, the Central Bank of the Russian Federation had $630.2 billion in reserves, and this amount includes $113.5 billion from the liquid part of the National Welfare Fund.

In countries that directly impose sanctions, 39% of the reserves are placed. However, if Japan and the IMF join the freeze, then 56% of the gold reserves will be under the “blockade”.

Gold, which is stored in Russia and therefore protected from physical confiscation, may also turn out to be useless: sanctions will hardly allow it to be sold on the world market for hard currency. This could bring the share of blocked reserves to 77%.

In China, as of the last reporting date, the Central Bank (June 30, 2021) kept 14.2% of reserves. However, we are talking mainly about the yuan, which is only suitable for bilateral trade.

If 80% of the reserves are frozen, the monetary rate (the ratio of the M2 money supply to the gold reserves) can soar 5-6 times, Abelev believes. A ban on foreign exchange transactions is possible, and a black currency market with two rates - official and actual, he believes.

The effect of sanctions against the Bank of Russia will be similar to what happened to the economy in 1991, warns Elena Rybakova, Deputy Chief Economist, Institute of International Finance: This could lead to a run on depositors and dollarization, a sharp fall [of the ruble], and possibly the complete collapse of the Russian financial system.”

According to Aleksashenko, the situation is “much worse than in 1991, because it is not clear under what conditions all this can be canceled”, - Finance reports. RU.

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