The Russian ruble is declining against all currencies, including against the Belarusian ruble, Vadim Iosub, senior analyst at Alpari, notes.
According to him, the main reason for the fall of the Russian currency is US sanctions. The expert recalls that in April the United States imposed sanctions against 24 major Russian businessmen and officials. Since yesterday, sanctions have been in place due to the poisoning of the Skripals.
These purely Russian cases were superimposed on the currency crisis in almost all developing countries: there was a serious fall in the Turkish lira and the Brazilian real, backfired in Mexico, in South Africa, the economist states.
The expert emphasizes that almost all currencies of the CIS states are declining against the dollar. However, the Belarusian ruble looks even better currencies other developing countries where there are foreign investors.
But not because we have such a strong ruble or a strong economy. It's just that there are practically no foreign investors in the market of public debt denominated in Belarusian rubles. They didn’t come here, so they don’t leave here, - the analyst notes.
Apparently, the current US sanctions against Russia are not the last ones. On August 21, Congress held hearings on new anti-Russian sanctions related to Crimea, Donbass, and election interference in the United States.
In the future, everything is not very simple. For Belarusian economy the consequences of the tax maneuver can be very painful. The issue of duty-free deliveries of oil products to Belarus has aggravated, - says the economist.
Also, according to him, it is not yet clear whether the official Minsk will receive a Russian state loan of $1 billion.
According to the expert, if the government of Belarus resolves oil issues with the Russian Federation and agrees on a loan, then a weakening Russian ruble will fall to the Belarusian.
If we do not solve our problems, the Belarusian and Russian rubles will fall simultaneously. And the dollar will grow stronger against the Belarusian ruble, Vadim Iosub predicts.
He believes that for the time being it is not worth making changes in the currency basket of Belarus, where today 50% is the Russian ruble, 30% - the dollar and 20% - the euro.
While almost 50% of Belarusian exports go to Russia, it is quite reasonable that the Russian ruble also occupies half of the basket. If the geographic and monetary structure of our exports seriously changes, then only then will there be a reason to talk about a change in the currency basket, - believes a senior analyst at Alpari.
The economist recalls that the leadership of Belarus talks a lot about the need to diversify the geography of exports, but in reality nothing changes: Russia remains the main sales market.
This addiction is harmful and painful. hit on Russian economy automatically means a decrease in demand for Belarusian products, Vadim Iosub emphasizes.
After the denomination for 1 Belarusian ruble, 32 Russian rubles will have to be paid immediately. What, Belarusian currency, after "cutting off" four zeros, has it become stronger? Answered by Konstantin Korishchenko, Professor of the Faculty of Finance and Banking, RANEPA
On July 1, a denomination took place in Belarus. The authorities "cut off" 4 zeros at once. We decided to find out from Konstantin Korishchenko, professor at the Faculty of Finance and Banking, RANEPA, former deputy chairman Central Bank of Russia, why it was necessary and what it will give for the economy.
On July 1, the denomination of the national currency starts in Belarus. You should not be afraid of the overseas word - at its core, this is an exclusively technical operation. Old-style banknotes are being replaced with new banknotes. At the same time, four zeros will disappear from them.
- Why was the denomination of the Belarusian ruble necessary?
In short, to simplify economic turnover. Both in practical life and in calculations, extra numbers are an additional risk of making a mistake. That's why a large number of zeros created a certain discomfort and interfered economic activity states. This is the main goal of any denomination. A side effect is the strengthening of the national currency rate in the state. The denomination increases its stability, removes the excess money supply from turnover.
- Why did you decide to cut exactly 4 zeros on banknotes, and not, say, 3?
At one time in Russia they reduced 3 zeros - then there was such a scale of prices that it was more convenient to use a ratio of 1000: 1. Well, in Belarus, the scale of prices is different, respectively, they adjusted to it.
- For 1 dollar now they give 2 Belarusian rubles. Is the Belarusian ruble stronger than the Russian one now?
- Maybe now in Russia to carry out a denomination?
And this, by the way, is a perfectly reasonable question. I think the authorities can come to this. For example, for a convenient settlement system, it is better when exchange rates in pairs are within 100. That is, if a dollar or euro, for example, costs more than 100 rubles, this will be a reason for denomination. Although there is an example of Japan, where more than 100 yen is given for a dollar, and the government does not change anything. But this is rather an exception.
1 US dollar - 2.0053;
1 euro - 2.2210;
100 Russian rubles - 3.1212;
1 lev - 1.1366;
100 hryvnia - 8.0647;
10 zł - 5.0248;
100 yen - 1.9523;
10 Chinese yuan - 3.0167;
10 Turkish lira - 6.9252;
£1 - 2.6880;
100 Czech crowns - 8.2059;
1 Swiss franc - 2.0467.
Indeed, as a rule, the currencies of rich countries are more expensive than those of poor ones. But this is a prime example of how correlation doesn't always equal causation. This trend is related to the fact that the developed countries have a more stable monetary policy, inflation is lower there, devaluation episodes are less common (examples of how a currency loses value are the Zimbabwean dollar and the Venezuelan bolivar). However, there are precedents when developed countries maintain low nominal exchange rates, usually left over from less stable times: say, Japan and South Korea have fairly cheap currencies (1 ruble as of 04/01/2017 is approximately 2 yen or 20 won). The exchange rate of the Italian lira at the time of its withdrawal from circulation was almost 2000 per euro. At the same time, any country can denominate at any time and make its currency at least ten times more expensive than the euro and the US dollar - as you might guess, this will not affect the living standards of citizens in any way. For example, Belarus recently carried out another denomination, making its ruble 30 times more expensive than the Russian one.
All currencies of the post-Soviet space are descended from the Soviet ruble, but this is a very distant relationship. With the collapse of the USSR, the republics began to issue various temporary currencies (coupons, coupons, etc.), which took over the early post-Soviet inflation and were replaced a few years later by "real" national money with a passing denomination. It was held in each country at its own time and in its own proportions (say, in Lithuania 1:100, in Latvia 1:200, in Ukraine 1:100,000, in Georgia 1:1,000,000, in Russia in 1997 there was a denomination 1:1000). This in itself created a fair amount of randomness in the exchange rates of the former Soviet republics. Since then, a lot of water has flowed. Different countries pursued different monetary policies. Somewhere, like in Belarus, they turned on at full capacity printing press and dispersed inflation, somewhere they tied their currency to the dollar, which ensured the stability of the exchange rate. In addition, the three Baltic countries have generally switched to the euro (which requires the fulfillment of very strict criteria for the stability of the state's financial position), so it is not clear which "Baltic currencies" are referred to in the question.
The Russian ruble, generally speaking, is a problematic currency, as we had the opportunity to verify in December 2014. We have quite high inflation; the natural wealth of Russia mentioned in the question leads to the fact that the exchange rate of the ruble is entirely dependent on fluctuations in oil prices. Given these facts and the complex history of post-Soviet currencies, it is not surprising that some of the neighbors' currencies are more expensive than the Russian one. As already noted, these facts have nothing to do with the real level of the purchasing power of the population.
Vadim Iosub is a senior analyst at Alpari. Analysis methods specialist financial markets and trust management of investment portfolios for stock market. Since 1998 he has been working for Forex market, since 2005 - on the Russian stock market.
Yesterday, the Belarusian currency crossed the mark of 2.1 rubles against the dollar, and this has become quite an important and, to say the least, a bit disturbing event for many. Let's see what is happening, are there any reasons for concern and what can be expected from quotes in the near future. To tell the truth, a real currency detective has been played out, which has no obvious outcome yet, but a competent economist is quite capable of identifying the main suspect.
In recent weeks, I have had to answer the questions “What is happening to our currency?” not only from the side of the Belarusians. Every day, Russians are interested in what is happening with their ruble. Also daily calls from Ukraine: "The hryvnia is falling - why?" They also write from Kazakhstan: “How long will our tenge become cheaper?” It is significant that everyone is interested in this at the same time, and it can be immediately noted that there is nothing surprising in what is happening with the Belarusian ruble (although there is one intrigue - but more on that later).
And what is happening on the world currency arena, in fact, is this: the dollar is growing significantly against all currencies of countries that are commonly called "developing" or "with emerging economies."
You can look at the picture more broadly, covering the whole world, and then we will see that in the last week, collapses in the exchange rate of the national currency have been observed in Turkey, Argentina, India, Iran, and South Africa. And just yesterday or the day before yesterday, the dollar rates in Iran and India set historic highs.
Taking into account today's trading since the beginning of the year, the dollar has added about 7% to the Belarusian ruble, but in Turkey and Argentina there were daily depreciations of the national currency against the dollar, exceeding our nine-month indicator. In addition, we note that the trend for the growth of the dollar against the hryvnia, tenge and the Russian ruble is much more pronounced.
In fact, we are witnessing a global redistribution of investments. This is not a unique phenomenon, it has happened before and will definitely happen more than once in the future. Today, in the opinion of global world investors, investments in developing countries have become more risky, at the same time, the benefits from investing in countries with developed economies have increased (in particular, this is due to the fact that the US Federal Reserve has raised and plans to further raise its rates) .
Investor money is flowing from developing countries to advanced economies. This process occurs as a result of a trigger being fired, followed by an avalanche effect. The US economic sanctions against Russia and Turkey, the growth of duties on metals supplied from the same Turkey, the threat of default in Argentina probably served as a trigger. In Kazakhstan, Ukraine and Belarus there are no such specific reasons, we can say that we just got “under distribution” on a tangent, with all the rest developing countries"for company".
Once again: this is a global process, we are not the main participant in it and, what is especially important, we are far from being the main victim.
Is it possible to say that Belarus holds a blow well? Personally, I would suggest that this could be said before August. At the end of the summer, interesting changes began to take place in the country's foreign exchange market, which most of the inhabitants, most likely, would not attach importance to.
I propose to look not at the dynamics of the Belarusian ruble against the dollar, but at how our currency is changing in relation to the Russian ruble.
Since the beginning of this year, for seven and a half months in a row, the Belarusian ruble has generally been strengthening, the value of the currency basket has been declining. When during this period in Russia there were repeated large jumps in the exchange rate of the national currency against the dollar, the Belarusian ruble reacted in a standard way: the dollar grew against the Belarusian ruble, but at the same time Russian currency cheaper than ours.
This situation has changed since the end of August. For two weeks already, the Belarusian ruble has been depreciating simultaneously against the dollar, the euro and the Russian ruble. The value of the currency basket is growing, and our currency is weakening. At the same time, it is important that the last few days the Russian ruble has been feeling very bad, but even in this situation it is growing in relation to ours.
We're getting to the heart of the intrigue. Traditionally, it is considered that last years in our country there is a market exchange rate formation: fluctuations in the value of the national currency depend on the ratio of supply and demand. In accordance with this, it can be assumed that around August 25, demand for all major foreign currencies sharply increased in Belarus. And here it must be said that the subject that created this demand is not very clear, there is simply no reason for such interest. I doubt very much that this is the population or Belarusian enterprises.
But just like that, nothing happens in the foreign exchange market. Therefore, we can assume that our National Bank, which, buying or selling currency, has the right not to publish information about the transactions. We will be able to find out indirectly that they were held later, noticing, for example, that the country's gold and foreign exchange reserves have grown.
What is wrong with the fact that the state buys foreign currency and replenishes gold reserves? What is happening today with the Belarusian ruble and how it compares with the currency basket is reminiscent of a sharp change in trend. Our National Bank since the beginning of 2015 in speeches and documents declaring the main directions monetary policy for a year, declares that he does not interfere in exchange rate formation and does not determine trends, but is only ready to smooth out sharp fluctuations in exchange rates during the day.
Meanwhile, recently, when the Belarusian ruble has been strengthening against the Russian one, many representatives of the domestic industry and Agriculture and even the relevant ministries up to their superiors have complained that this state of affairs interferes with trade with Russia and makes our products less competitive in the market of the main economic partner. They asked to influence the situation, to intervene.
Literally at the end of August, one of the "tops" of the National Bank once again said: we will not artificially devalue the Belarusian ruble. Not only that, he argued and detailed explained why. Obviously this will worsen economic situation, the dollar may rise even stronger. State external debt predominantly dollar, many enterprises have dollar loans - it turns out that in the end no one will benefit from artificial devaluation. The growth of the dollar by only 1% leads to the fact that enterprises and the state will have to spend a total of 560 million rubles more on debt servicing!
Unfortunately, judging by indirect evidence, the National Bank has begun to artificially weaken the Belarusian ruble against the Russian one for the last two weeks. Apparently, this could be the result of pressure from the industrial-agrarian lobby in the government. I repeat once again: no one caught anyone by the hand, and all this is nothing more than my assumptions. I would be happy to be wrong.
Now for the conclusions. Almost certainly in the near future to our national currency the dollar and the euro will grow, but this will happen moderately, within reasonable, not causing panic limits. And it is important to understand that this is not a unique problem of our country, but a global trend. It is difficult to guess what will happen to the Russian ruble. I really hope that we will not witness how foreign exchange market again tried to steer manually. All previous attempts to do so in Belarus ended in failure.
If the impact on the exchange rate of the Russian ruble was a one-time action, which will end soon, nothing terrible will happen. But the very possibility that it has become possible again is alarming.
I would note that, despite the weakening of the domestic currency, deposits in it still remain quite profitable. At the same time, I would recommend getting rid of savings in the Russian ruble, because in the coming months, judging by the statements of representatives of the US government, a whole cascade of sanctions shocks may await him.
