Dollar value might rise to 37 rubles by the end of 2013

 

By Vestnik Kavkaza

  

Yesterday the official exchange rate of the euro against the ruble of the CBR increased by 16.66 kopecks - up to 44.0294 rubles, and the dollar rate – by 7.80 kopecks, amounting to 33.0006 rubles. According to Prime, the Russian currency is depreciated unde ther pressure of declining oil prices. Investors are awaiting the publication of statistics on its reserves from the American Petroleum Institute (API), as well as the minutes of meetings of the Federal Open Market Committee of the U.S. Federal Reserve System. A barrel of Brent is below 110 dollars to 109.4 dollars (-0.5% to the previous fixing).

Euro against the dollar is going up against the publication of the German Central Bank monthly report, which shows that the base rate of the ECB can be raised in case of increasing inflation risks.

 

Over the last month the dollar has become more expensive by an average of 50 kopecks. The Chairman of the Committee on Financial Markets and Credit Organizations of the Chamber of Commerce of the Russian Federation, Yakov Mirkin, expects a gradual devaluation of the ruble. According to the expert, by the end of the year the US dollar will cost about 36-37 rubles.

 

“The current financial and economic situation in Russia is a prerequisite for the gradual weakening of the ruble”, Mirkin said. “Not for a momentous explosive devaluation, but maybe for a long weakening. What do I mean? This is especially due to the deterioration of the trade balance, the reduction of the surplus, the rapid decrease in the surplus of the current account of payments balance, and the continuous export of capital. And if the first impression was that the export of capital this year would be reduced, it is now becoming evident that its volume will be around $50-70 billion. We are not alone. The ruble, as well as other financial assets in Russia, is in close correspondence with other financial assets, including the dollar-euro exchange rate, primarily the euro, and the state of other financial assets. The situation with capital export is very clear. First of all, the center of capital imports is the U.S., also capital has now begun to concentrate on the developed markets, this can be very well seen from the dynamics of the U.S. stock market, 18-20% growth compared to the beginning of the year, and the dynamics of the stock markets of France and Germany are growth of 8-10 % compared to the beginning of the year. That is, there is concentration of capital and the capital flows out from the emerging markets”.

 

According to the expert, “the ruble corresponds remarkably with the Brazilian real. A dramatic trend can be observed – the four BRIC countries, with the exception of the Chinese yuan, which is gradually getting stronger relative to the US dollar, all the other currencies, i.e. the Russian ruble, the Brazilian real and the rupee, are becoming weaker, it is a parallel process associated with the export of capital and the deterioration of the economic situation in these countries. Thus, the objective economic situation, if we forget about the policy of the Central Bank of Russia, which is aimed at curbing the weakening of the ruble, as a whole contributes not to an  explosive devaluation, of course this will not happen, but until the situation improves it contributes to the slow weakening of the ruble, which actually can be good because the ruble is overvalued”.