Russia buys dollars

In September and October 2016, Russians spent 5.4% of their income to purchase foreign currency, which is the highest indicator of currency purchases among population since December, 2014, according to data of the Federal State Statistics Service.

On December 16, 2014, the exchange rates during the trading day rose above 80 rubles per dollar and 100 rubles per euro.

According to experts, the current activity of Russians is due to seasonal factors and growing incomes in certain groups. The Federal State Statistics Service noted that Russian people's share of spending on currency was less in each of the first three quarters of 2016 than in the corresponding period last year, but gradually grew: 3.7%, 3.8% and 4.5%, respectively.

In addition, the decline in real incomes has continued on an annual basis for already two years, and even accelerated in October to 5.9% (from 1.5% in September). In October incomes fell by 0.6%. In general, during the year the revenues of Russians decreased by 0.8%, Gazeta.ru reports.

At the same time, the cost of deposits, securities, loan repayment and purchase of real estate declined to 8.9% (in October 2015 it was 11% of total income).

According to the Central Bank, in October the volume of individuals' deposits increased in comparison with September only by 0.2%, to 23.374 trillion rubles, and in August and September there was a decline in the index of 0.3 and 0.2%, respectively.

Professor of the RANEPA faculty of Finance, Money Circulation and Credit, Yuri Yudenkov, speaking to Vestnik Kavkaza, cited three reasons for increase in purchase of dollars by the population: the critical state of the economy, massive amount of bad banking assets of 7% and the desire of citizens to insure against future risks.

"People want to protect themselves somehow, while there is the possibility of free currency exchange, especially since there are various rumors about the Central Bank's future monetary policy to limit the exchange of money. There is another reason - the New Year is coming, people will travel abroad for a vacation, and since the ruble to dollar ratio has changed, statistics shows that they buy a lot of currency in the third quarter. In fact, they spend much rubles to purchase dollars, but they buy even less amount of  currency than before," Yuri Yudenkov noticed.

An associate professor of Stock Markets and Financial Engineering of RANEPA, Vasiliy Yakimkin, in turn, noted that December is "vague month" for Russians, when Russian citizens seek to protect their savings, purchasing foreign currency. "I think it is not quite justified. There are many expert opinions, which create hysteria that the ruble may decline," the expert said.

"I believe that 2017 is the year of the ruble, the ruble will be strengthened to a wide range of currencies, unless, of course, there will be no force majeure. There is an aphorism in the financial markets "Look, what the crowd does and do the opposite thing". Since people buy dollars, it's time to sell them," Vasiliy Yakimkin urged.