By Vestnik Kavkaza
On Monday oil prices rose on the international oil markets. Experts think that the growth in oil prices will encourage growth of the ruble exchange rate. However, today the ruble continued to fall by 18 kopecks in comparison with the dollar and 21 kopecks in comparison with the euro. Probably the crucial moment for the ruble’s growth will take place this week, if oil prices continue to grow.
Mikhail Yemelyanov, the first deputy chairman of the State Duma Committee for Economic Policy, Innovative Development, and Entrepreneurship, believes there are several factors which influence exchange rates: “If a fall in exchange rates happens due to short-term speculative factors, the state should actively interfere in the process. If more fundamental factors operate, the state shouldn’t spend currency on price support; it is useful to resist it, the ruble would fall to a certain level anyway. But the state would lose reserves, i.e. would use its strategic weapons inappropriately.”
According to Yemelyanov, any problems with the ruble occur due to the influence of the U.S. Federal Reserve System: “The policy of quantitative easing is over; certain financial instruments are being brought out; there are rumors that the U.S. will increase key interest. Where does this lead? There are fewer dollar reserves in the world economy. They become attractive for investments. Speculators are focused on the dollar, abandoning currencies of developing countries and oil. That’s why oil prices are falling, and the ruble exchange rate is falling as well. It's not only the ruble that's falling. The Turkish lira and the South African rand are falling as well. The other thing is that the ruble is falling deeper and harder.”
Another fundamental reason for the ruble’s fall, according to the expert, is the policy which has been provided by the Central Bank since 2003, when the ruble strengthened in real terms: “The Central Bank has sufficient resources to prevent strengthening of the ruble, as it grew on speculative grounds, meaning the strengthening of the ruble wasn’t based on the strength of our economy or a growth in labour effectiveness. So two factors – the influence of the American Federal Reserve System, the U.S. acts, according to its interests, and excessive strengthening of the ruble in previous years – are causing the fall.”
Yemelyanov says it is necessary to follow the Americans’ steps: “At first they made a clear sign that they would stop the policy of quantitative easing. Later they softened their policy a bit. A week ago a protocol of the U.S. Federal Reserve System was published. It admits that strengthening of the dollar will negatively influence the U.S. economy, as economic growth is not stable in the US, i.e. the Americans won’t risk strengthening the dollar.”
The expert doesn’t exclude the influence of a political factor: “The influence of the oil market and oil prices falling damage Russia, Iran, Venezuela, i.e. the main geopolitical rivals of the US. So political factors also play a role. Obviously oil price falls influence the Russian economy more than sanctions.”
Mikhail Yemelyanov forecasts that the ruble will stabilize in comparison with the dollar, when real growth starts in the real sector of the economy of Russia: “I mean when it is profitable to produce in Russia. Then there will be a certain balance between the Russian economy and world economies. Today it is not profitable to produce in Russia. I give you one example: production of a wheel for KAMAZ. A wheel made in China is cheaper than metal which is used in Russia for making wheels.”
