Possibility of devaluation c. Devaluation - what is it in simple words and what does it mean for your wallet? In what currency should an ordinary person store money?

Recently, Russian citizens have been extremely concerned about their financial condition. Assessing the current state of the country's economy, experts say that devaluation in the new year 2019 is still worth waiting for.

At the moment, it seems that the exchange rate of the domestic currency relative to the dollar is at a fairly stable level. But under the influence of a number of factors, such as, for example, sanctions, conflict situations in foreign policy and the expansion of the state’s territory in recent years, a decrease in the price and volume of oil sales, the indicators may worsen significantly.

The decline in the price of “black gold” provoked the introduction of new rules, according to which, when selling a barrel of oil for $40, the Ministry of Finance will buy foreign currency for the entire amount of proceeds.

In addition, from January 15, the Ministry of Finance is expected to resume market purchases of foreign currency to replenish the National Welfare Fund as part of the fiscal rule. This has always led to a weakening of the ruble, and this cannot be avoided in 2019 either. In its statement timed to coincide with an increase in the key rate by 0.25%, the Central Bank speaks about this directly.

It would do well for people to start monitoring how their wallets and pockets are filled now. And it’s better not to delay applying for loans or credit cards, because with devaluation the rates on them will only rise.

What is ruble devaluation?

First of all, we will explain to you what devaluation is in simple words. All in all, ruble devaluation- this is a decrease in the real exchange rate against the background of hard currencies (dollar, euro). It is considered an instrument of central banks, since it is the complete opposite of the process of increasing the ruble exchange rate (revaluation).

There are open and hidden devaluations. The first is officially announced by national banks, but not the second, because in this case we are talking about a depreciation without withdrawing money from the general foreign exchange turnover.

The official devaluation of the ruble in Russia was observed twice. It first became a consequence of default in 1998. Then the currency exchange rate against the dollar fell by 246. Much smaller rates of depreciation of the domestic currency were observed in 2008. Then the ruble fell by 30%.

The devaluation of the ruble in 2019 has slowed down a bit, but continues to worry the population. At times we even have to say that this year the authorities will begin a manual fourth devaluation, because a stable ruble today may be unprofitable for higher-ups and structures.

Official forecasts of the ruble exchange rate

The forecast exchange rate of the ruble is, first of all, displayed in the Social and Economic Development Strategy of the Russian Federation. It states that in 2018 the ruble exchange rate will be 64.9 rubles per dollar, and in 2019 - 2020 the ruble will weaken to 68 - 69 rubles per dollar.

But as we know already in August 2018, the exchange rate was already 66.89 rubles. From this we can conclude that the official forecast is not particularly accurate.
Other forecasts take into account capital outflows and Central Bank policy, not just falling oil prices. Let's say the Ministry of Finance does not expect serious fluctuations in the exchange rate. However, with a planning horizon of more than 10 years, the accuracy of the forecast is low. Every year, information about the predicted ruble/dollar exchange rate changes and is highly dependent on market conditions, so you should not rely on it in your decisions and it is better to take it as a reference.

But we would like to note that not only official bodies make a forecast for the ruble exchange rate. For example, Sberbank also makes forecasts, but its accuracy in recent years has turned out to be even lower than that of official sources. His assumptions that the weighted average exchange rate of the ruble in 2018 would be 58 rubles per dollar were dispelled already in the second quarter of 2018. Needless to say, the bank’s forecast that in 2019 the exchange rate will be 58.5 rubles does not stand up to criticism at the moment? In reality, the ruble/dollar exchange rate has always been significantly higher than official forecasts.

Expert opinions

Experts and market participants, unlike official sources, assess the situation on the market a little more accurately and their forecasts are usually more accurate.

For example, leading analyst at Amarkets, Artem Deev, stated that

As for the prospects for the national currency for 2019, taking into account the expected resumption of decline in oil prices, as well as a new round of Western sanctions aggression, devaluation of the ruble is almost inevitable. Most likely, very soon the new reality for the exchange rate will be quotes above 70 rubles per dollar.”

Vladimir Tikhomirov, chief economist of the BCS financial group, believes

The stabilization of the economy, noticeable in recent years, is only a temporary phenomenon. Negative political and foreign economic conditions will lead to a further decline in the economy and the national currency.

Denis Poryvay, Raiffeisenbank

The domestic currency is expected to devaluate in 2019.

Very often, experts note that if oil prices remain in the range of $50 - $60 per barrel of Brent, and massive purchases of currency by the Central Bank and the Ministry of Finance begin, then the dollar exchange rate will go up, and will not even go up, but will fly - to the level of 75-77 rubles for a dollar.

In addition, experts note the outflow of capital and investment. For example, for November 2018, the data is simply shocking - capital outflow is already 3.3 times higher than last year’s volume (in just one month), with the total amount of outflow being 2 times more than in the previous two years.

As can be noted, the experts did not come to any single decision regarding the ruble.

Ruble and real estate

As you know, changes in exchange rates cannot bypass any area of ​​life of the country's population. Naturally, the devaluation processes will not bypass the real estate market. Rumor has it that a fall of the ruble by at least 5% compared to the current exchange rate will lead to a sharp rise in prices for apartments, houses, and so on.

The devaluation of the ruble will also change the lending system. Along with monetary growth, there will also be an increase in loan interest rates. Therefore, if your profit is not measured in hard foreign currency, you should hold off on borrowing money.

How to avoid becoming a victim of devaluation

You can protect your pockets from the monetary panacea described above by resorting to the following methods:

• focus on natural hedging (it is worth bringing the currency into a single denomination and it is desirable that they be represented in foreign banknotes);
• always make financial clauses (agree with clients/creditors on possible actions if the rate of the domestic currency increases in comparison with the hard currency);
• Organize yourself
• convert existing funds into hard denominations;
• acquisition of shares of some enterprises, organizations, etc.;
• purchase of investment fund securities;
• purchase of precious metals
• (stable and safe haven for savings, especially worth considering this issue now if you have been saving for a long time)

So, devaluation is a complex process, which is extremely difficult to understand, but it is necessary in order to protect yourself from unnecessary monetary losses. Be vigilant and don't let currency games empty your pockets.

Many Russians are worried about what will happen to the ruble in 2019. Expert opinions vary and citizens can only guess how the changes will affect their lives. Two more burning and actively discussed issues are the possibility of devaluation and redenomination of the ruble in 2019. And if doubts arise regarding the first point, then concerns regarding the second can be considered far-fetched and without practical justification. We will cover these topics in more detail in the article.

Article outline:

1. general information

2. Russian experts about the ruble in 2019.

3. Foreign experts about the ruble exchange rate 2019.
5. Is it possible to redenominate the ruble in 2019?

6. What does the ruble exchange rate depend on?

general information

At the end of 2014, unexpectedly for many Russians, the ruble depreciated. From September 2014 to January 2015, the rate increased from 37.99 rubles. to 66.10. Then it gradually fell and in May 2015, 1 dollar became equal to 50.08 rubles. In May 2014, this figure was 34.71 rubles. At the end of January 2016, Russians were already paying about 80 rubles for 1 dollar. Only the lazy do not make predictions about this. differ from each other exactly the opposite and Russians can only wait and hope that prices for goods and services will not rise too rapidly.

Currently, the dynamics of the ruble is influenced by many external factors:

1. Level of world oil prices.
2. Sanctions from the US and Western European countries.
3. The situation in the eastern part of Ukraine.
4. The situation in Syria.

Russian experts about the ruble in 2019

Many experts undertake to predict the rise or fall of the Russian currency, but their conclusions most often relate to short-term periods. It is impossible to reliably say what will happen to the ruble throughout 2019.

We invite you to familiarize yourself with the opinions of Russian experts regarding the value of the ruble in 2019.

The former Minister of Finance of the Russian Federation, Alexei Kudrin, predicts a collapse of the national economy, an even greater decrease in the value of the ruble, as a result of which the purchasing power of the country's population will significantly decrease. Economist Vladimir Tikhomirov agrees with Kudrin’s opinion and believes that short-term stability of the ruble exchange rate will still not save the national currency from collapsing.

The head of the management company Finam Management, Nikolai Solabuto, along with many Russian analysts, is of the opinion that the dollar exchange rate will soon reach 200 rubles per unit and, therefore, the value of the ruble will fall sharply. This situation will occur as a result of a regular decrease in the price of oil over several months.

According to the preliminary forecast announced by the Head of the Ministry of Economic Development of the Russian Federation, Alexei Ulyukaev, the dollar exchange rate this year will be equal to 63.5 rubles.

Many experts assume that in 2016 oil prices will rise and the national currency exchange rate will gradually reach the level of 2013, when the cost of 1 dollar was 30-32 rubles.

Foreign experts about the ruble exchange rate 2019

The opinions of foreign experts regarding the Russian currency are less varied than those of domestic analysts.

Specialists from the international rating agency Moody’s Investors Service (Moody’s) believe that the economic situation in our country is gradually stabilizing as a result of rising oil prices (up to $57 per barrel). This will entail a strengthening of the ruble exchange rate and setting the cost of one unit of American currency at 50-53 rubles.

Bank of America experts believe that the price of $1 will be equal to 60-61 rubles. Experts from the economic forecasting agency Apecon voice the minimum value of the dollar at 65-66 rubles. Citigroup experts said that the dollar exchange rate this year will increase to at least 70 rubles.

According to the results of analytical studies by the European Bank for Reconstruction and Development, the injection of foreign capital into the Russian economy will decrease by at least 10% compared to the previous year.

Reasons for this fact:

• Increase in the number of loans received by national banks.
• Decrease in the volume of funds provided by foreign partners.

Is the ruble devaluation expected in 2019?

The World Bank's initial forecasts were for GDP to grow by 0.1% in 2019. Currently, the Russian economy is expected to deteriorate and GDP to fall by 0.3%.

Despite the abundance of reasons that result in the depreciation of the Russian currency, one of the leading ones is the complication of the geopolitical situation at the international level and the imposition of economic sanctions on the Russian Federation. Western states reduced the price of oil and this resulted in a fall in the ruble.

The Chairman of the Central Bank of the Russian Federation, Elvira Nabiullina, suggested that the inflation rate would reach 6%. The decline will occur as a result of the implementation of the import substitution policy.

The head of the Central Bank of the Russian Federation notes that the fall of the ruble depends on external factors, which include:

• Changes in Federal Reserve System (FRS) rates.
• China's economic slowdown.
• Trends in the oil market.

According to First Deputy Chairman of the Central Bank of Russia Sergei Shvetsov, the dollar exchange rate may decline after the Fed rate increases.

Analysts at the international rating agency Moody's believe that the slowdown in China's gross domestic product growth rate will restrain prices for metals and oil. And under these conditions, the ruble will continue to depreciate. One of the key factors for the Russian currency is.

There is a possibility of a market collapse and subsequent devaluation of the ruble. The Ministry of Finance expects a reduction in oil prices to $20 per barrel for a short period. This situation will affect the financial condition of oil companies and lead to a reduction in the supply of raw materials. The result will be an increase in oil prices.

The possibility of devaluation of the Russian currency will depend on the pace of economic recovery in the country.

The negative consequences of devaluation include the fact that the incomes of citizens of our country will decrease by at least 30%. Inflation will rise in 2019, resulting in higher prices for consumer goods and services, as well as food.

There are also optimistic consequences:

1. The policy of substitution of imported goods contributes to the development and support of domestic producers.
2. Increase in export volumes.
3. Reducing expenses of national reserve funds.

In order for these advantages to show themselves in action, there is a constant need to control the process of devaluation of the Russian currency.

Is it possible to denominate the ruble in 2019?

Denomination is the procedure of replacing banknotes of a higher denomination with those of a smaller denomination. For example, instead of 500 rubles, you will receive only 5. As a result of changes in the real value of money, you will have to recalculate wages, prices for goods and services, etc. All these actions are necessary to strengthen the monetary unit.

The last time denomination was carried out in Russia was in 1998. The currency exchange ratio at that time was 1000 to 1.

Denomination covers all spheres of economic life and requires considerable financial costs. Currently, the Government is trying to minimize state budget expenses and allocate funds exclusively to priority areas. And the projected inflation rates for 2016 do not look overly threatening. Therefore, concerns about a possible denomination are slightly exaggerated.

The opinions of experts on this issue coincided. Almost all of them believe that the redenomination of the ruble will entail extremely negative consequences. “First of all, trust in the national currency will be undermined and citizens will begin to transfer savings into foreign money,” noted former Deputy Minister of Economic Development Mikhail Dmitriev. At the moment, the implementation of denomination in Russia in 2016 is considered inappropriate.

What does the ruble exchange rate depend on?

The exchange rate of the domestic currency depends on many different factors, which can be divided into positive and negative.

Factors contributing to the strengthening of the ruble exchange rate include:

1. Stable political situation in the state.
2. Increase in oil prices on the world market.
3. Attitude of the population towards the national currency.
4. Attitude of foreign citizens to the Russian currency.
5. Investor interest in the Russian economy.
6. Expansion of production and increase in its volumes.

Let's look at each point in more detail:

Stable political situation in the country

This factor is the basis of Russia’s economic development. Therefore, you should not discount it even though it is not key to the issue under consideration.

Increase in the cost of oil on the world market

There is a huge amount of oil in the depths of the Russian soil. Part of the wealth is spent on the needs of the country, but a considerable amount is also spent on exports. The more oil Russia exports, the more money flows into the state budget. It is not difficult to guess that if the value of “black wealth” falls, the ruble exchange rate against the dollar will rapidly fall and, conversely, the higher the price of oil rises, the more the position of the Russian currency will strengthen.

Population's attitude towards the national currency

This factor is considered one of the important ones, since if Russians trust their currency and make deposits in it, this will contribute to an increase in the exchange rate and an increase in lending to the state economy. This is explained by the fact that citizens will spend the money they earn not on buying dollars, but on investing in the economy of their country.

Attitude of foreign citizens to the Russian currency

Similar to the previous point, if citizens of other countries confirm their trust in the Russian currency by investing their funds in the economy of our country, this will contribute to an increase in the ruble exchange rate. Unfortunately, this factor does not work 100%, since foreign citizens prefer to keep their savings in the money of their state or in a generally recognized world currency.

Investor interest in the Russian economy

This factor can have a significant impact on the growth and strengthening of the Russian currency. But in order for investors to be really interested, their investments must result in a good profit.

Expansion of production and increase in its volumes

This point works as follows: The production of a larger variety of high-quality goods will allow not only to distribute them within the state, but also to send them for export. As a result of the sale of products to other countries, more foreign currency will flow into the economy of the Russian Federation.

Factors contributing to the weakening of the ruble exchange rate include:

1. The value of current foreign currency on the market.
2. Outflow of Russian capital to other countries.
3. Actions of the country's population.
4. Slowdown in GDP growth.
5. Decrease in production growth rates.

Let's consider all the points:

The value of current foreign currency on the market

This is one of the most important factors, since it is not possible to influence its fall or growth. The strengthening of the dollar against the ruble in 2016 leads to a significant fall in the ruble. The Russian economy practically cannot influence this.

Outflow of national capital to other countries

This factor is essentially a continuation of the previous one. This can be explained by the fact that as a result of the strengthening of foreign currency and the fall of the national currency, Russian investors prefer to transfer their funds into dollars.

Actions of the country's population

Many Russians are daily interested in the dynamics of the ruble exchange rate in relation to other currencies, which are the most stable. Citizens want to earn as much profit as possible on their savings. Therefore, they try to find the most favorable currency to store money in.

The following situation occurs: As a result of certain events, the ruble exchange rate falls, Russians transfer their savings to another currency, fearing that it will soon fall even more. Such actions lead to the deplorable state of the national currency.

Slowing GDP growth

It occurs when domestic goods are produced in small quantities, and the profit from their sales only covers wages and inflation. This indicates an excessively small volume of production in Russia and a lack of confidence in domestic goods on the part of the population. Due to the use in production of outdated equipment used in the last century.

Declining production growth rates

The population purchases only goods produced in other countries, which use high-quality raw materials and the latest technologies. As a result, the state's balance of payments decreases and the national currency falls.

Factors influencing the ruble are divided into three categories:

• Short term.
• Medium term.
• Long-term.

Short term factors

Duration - several days. Short-term factors are affecting the national currency now. Short-term fluctuations in the exchange rate are caused by news, investor sentiment and panic among the population buying foreign currency at exchange offices. Professional stock market players make money on such short-term factors.

Medium-term factors

Duration - several weeks or months. Low economic growth or decline affects the increase in capital outflow and causes a depreciation of the ruble. Economic growth attracts capital to the country, as a result of which demand for the Russian currency increases and the position of the ruble strengthens. Imports increase the demand for foreign currency and weaken the ruble. Exports help to depreciate the currency and strengthen the ruble.

Long-term factors

If the cost per unit of a product in Russia is less than in other countries, then it is more profitable to purchase it here. As a result, prices for goods in Russia will rise, and in another country they will fall. External debts negatively affect the ruble exchange rate, since the state and corporations have to buy currency on the market in order to pay obligations to foreign creditors.

1. 
   The official exchange rates of foreign currencies against the ruble are set daily (on working days) by order of the Bank of Russia and come into force on the next calendar day.

We will not use clever terms as information weapons, but will try to explain in the most ordinary words the content of a phrase that many are familiar with not from textbooks, but from their own lives or the lives of their parents, and this phrase does not evoke positive emotions, and is even perceived by some as a bad dream . So, What is ruble devaluation in simple terms?

On February 6 of this year (2017), the Ministry of Finance began purchasing foreign currency. On this occasion, a phrase appeared in the terminology of the economic establishment "new budget rule", which means the purchase of foreign currency with funds that are additional income for the country.

Purposes of currency purchase

Purchases are made:

Firstly, as opposed to the natural strengthening of the Russian currency, since its weakening is now more necessary;
Secondly, to maintain budget expenditure items in the planned volume. The new rule should act as a safety net (a kind of financial airbag).

How are these actions related to the devaluation of the ruble?

The very fact of supporting the weakening of the national currency implies a decrease in its exchange rate, which is technically associated with devaluation, but let us say that one should not be afraid of the term itself. But first things first.

The Ministry of Finance plans to purchase approximately 100 million dollars daily for four weeks (plus two days) – exactly thirty days. During this time, according to forecasts, the amount spent will be just over 113 billion rubles - funds that will replenish the country's budget pocket from the sale of oil and gas in February and early March. The Ministry of Finance explains that the replenishment is made from additional income received from the difference between the actual cost of the sold oil and gas package in Russia and the price planned for these hydrocarbons in the budget, the so-called cut-off point. The goals for purchasing currency are the best - replenishing the Reserve Fund. Budget funds will be saved in British pounds, European currency and American dollars.

Now the most interesting thing is the devaluation of the ruble in simple words

Facts of currency purchases by the state have occurred before, but how are they combined with devaluation? If the value of money changes, then the use of the term is quite acceptable. However, in our country, where in the recent past, citizens experienced the most unpleasant consequences precisely from certain financial manipulations carried out by government agencies, which also called devaluation, then money overnight became empty, you should not use this word, which is scary for people, without additional explanation.

People do not blindly believe in the statements of the Bank of Russia or the Ministry of Finance, therefore the phrase devaluation of the ruble should be used more carefully and always with additional explanations. It's all about the brightness of the term, the negative attitude of citizens towards it and the desire of economic writers to show off a strong word. Let's clarify the terminology; this is necessary for an unambiguous understanding of the meaning of further statements so that there are no discrepancies.

What is Ruble Devaluation and Revaluation?

Dictionary S.I. Ozhegova clearly explains the meaning of the term Devaluation, there are two of them:

1) Withdrawal from circulation of banknotes that have lost their solvency and replacing them with others, more capacious (in essence, erasing zeros).
2) An official statement about the reduction in the exchange rate of paper bills in circulation.

Both meanings are directly related to monetary reform; in modern reality, there is no talk of devaluation of the ruble as a reform at all.

The last two years without purchases

Over the past two years, there have been no purchases of foreign currency; the ruble was put into the so-called "free swimming". It all started with the fact that oil prices sank; at the same time, there was an informational humiliation of Russia, which invariably destroyed the state currency. In other words, such events could not but affect the ruble - it became noticeably cheaper, that is, its purchasing power decreased. Thus, quite quickly a situation developed where one could shout loudly “the ruble devalued”, but for some reason no such screams were heard. Although, comparing the viability of the Russian currency at the beginning of 2015 and the beginning of 2017, it can be argued that 15 has the right to bear the title of the year of ruble devaluation, and 2017 has not reached this status and, perhaps, will not achieve it.

A few supporting facts:

1. The US dollar at the Central Bank exchange rate cost:

For 30 days of the beginning of the year 15 ruble "lost weight" more than 12 rubles.

2. 2017 According to the announcement of the Central Bank of Russia, the same dollar “weighed”:

On January 2 – 60.65 rubles,
February 2 – 60.30,
February 8 – 59.19,
February 10 – 59.02.

Ruble revaluation

From the data presented, it is clear that during the indicated time at the beginning of 2017, the ruble only strengthened, which, in essence, is a revaluation movement, that is, a movement in the opposite direction from the decrease in solvency.

Currently, is the devaluation of the ruble a myth?

Now financial experts believe that through the purchase of foreign currency by the main financial institution of Russia, there will not be a sharp change in the exchange rate, and also that the rise of the American currency even by two rubles, to the level of 61 rubles, may take several weeks. Thus, ruble devaluation today it's still easy does not exist, and to talk about the regulator’s attempt to maintain a favorable exchange rate for the Russian manufacturer and for the economy as a whole, as a devaluation, is nothing more than a call to psychosis among the masses. Yes, the technical condition called devaluation will manifest itself after some time, but talking about it a lot and loudly is dangerous; it’s enough just to remember how the population relates to this term.

When the planned movement of the ruble towards weakening does begin, it is logical to either abandon the terms that cause people’s distrust, or better explain their meaning and talk in more detail about the related events taking place now. Although, it seems that pessimistic economic oracles and reactionary news sellers cannot help but use strong language that people perceive negatively.

The Ministry of Finance began to take the first actions aimed at preventing the domestic currency from strengthening. The devaluation of the ruble, of course, will occur, but not as a terrible and dangerous monster for the wallets of Russians, but as an ordinary profitable and desirable process for the country’s economy.
Quite simply

Ruble strengthening– the process of changing the price of the ruble to the dollar. Let’s say the initial position is 60 rubles per US dollar, then the value drops to 58 rubles per dollar, this process and the very fact of the decrease is called the strengthening of the ruble.

What will happen with a strong ruble, and what with a weak one?

1. Strong ruble.

A strengthening of the ruble is undesirable for domestic goods, because then they will begin to rise in price (in dollar terms) and will begin to approach the prices of goods from Western countries. At the same time, all Chinese goods will become cheaper, and we ourselves will begin to strive to buy them, abandoning our own, which in such a situation becomes unprofitable.

Filling the budget with rubles may become insufficient and lead to difficulties in fulfilling social obligations.

2. Weak ruble.

On the contrary, with a weak ruble, our goods are profitable both for us and for foreigners, who are more willing to buy cheaper (Russian) than the same, but more expensive (their, foreign). With a weak ruble, Russian goods become more profitable than Chinese ones for the Russians themselves.

Budget programs are carried out without additional funds, the Reserve Fund is replenished.

A weak ruble is beneficial now

You don’t need to be an academic to understand that the current state of affairs, when the dollar costs above 60 rubles, is beneficial for the domestic economy, and therefore for all Russian citizens. In these conditions, the task of bringing the value of the Russian currency closer to 65 rubles per dollar looks extremely important. Some experts (Andrey Lyushin - Loko-bank) are confident that the Russian currency will be able to get close to the target level no earlier than mid-summer.

Budget rule and budget law

The weak exchange rate of the domestic currency makes it possible to increase ruble revenues, however, they cannot go to the budget.

The fact is that for the next three years there is a law regulating the work of the budget, which for 2017 includes a deficit of 2 trillion 750 million rubles and stipulates that the budget deficit will not be replenished with additional income arising from the sale of oil and gas. True, the amount is just over 1.7 trillion. rubles can be obtained from independent funds. The Minister of Finance, Anton Siluanov, mentioned in his speech at the public council that the Ministry of Finance will use funds from the Reserve Fund, but this is only a partial injection, in general "fiscal rule" this issue does not resolve.

The mechanism for transferring funds from the Reserve Fund to the budget is still unclear; what it will be like now can only be guessed at. There are two options:

a) The Bank of the Russian Federation will buy currency from the Ministry of Finance,
b) it will be put on sale through the open market.

If the Bank of Russia makes the purchase, the weakening of the ruble as a goal will be achieved, but not a single expert can predict how fluctuating the weakened exchange rate will be, or whether its movement will lead to undesirable consequences.

If the currency enters the market, then fears arise that the ruble will begin to strengthen, which is in no way desirable.

However, let's return to the question posed above - this ruble devaluation. In a situation where the purchase of currency for the Reserve Fund has already begun, and its use has unanswered questions, one can only guess how people who are prejudiced against devaluation will behave. Will they begin to act as unpredictably as the ruble exchange rate, and will there then be a chain reaction with an unknown point of intensification?

Ozhegov’s dictionary defines two types of devaluation, but do not forget that they also differ in form:

One open
The second is hidden.

Hidden devaluation occurs without announcement and is characterized by the depreciation of money, which continues to be used as a means of payment. Ruble devaluation, which comes in its most explosive form, is fresh in the memory of the people. I would like to hope that the process of weakening the ruble, which is now necessary for the state’s economy, will be predictable, and the ill-fated devaluation will be soft and will not create shocks in people’s heads.

Solovyov on the devaluation of the ruble:

Will the ruble collapse in 2017? Experts from the Development Center of the National Research University Higher School of Economics told us whether we should be afraid of a sharp devaluation of the ruble.

The fall in oil prices in the near future threatens to result in a sharp devaluation of the ruble, which has strengthened noticeably this year thanks to the high rate of the Bank of Russia, which attracts international financial speculators. This is stated in the next report of the Development Center of the National Research University Higher School of Economics, “Comments on the State and Business.”

Strong ruble - high ricks

Commenting on the decision of the Ministry of Finance of the Russian Federation to enter the foreign exchange market, experts note that the Bank of Russia leveled this measure by absorbing additional liquidity, which leads to an increase in the attractiveness of Russian assets. “This, in turn, all other things being equal, will lead to an increase in the influx of speculative capital into the country, which, on the contrary, will contribute to the revaluation of the ruble,” the report says.

According to economists, the longer oil prices remain at a high level relative to the budgeted level, the greater the volume of speculative money can flow into Russia. However, this conceals one of the most significant risks: a possible reversal in the trend of world energy prices will lead to the withdrawal of this “hot” money from the Russian market. “And the later such a reversal happens (if it happens), the greater the demand for foreign currency will be presented, and almost simultaneously,” experts from the Development Center predict.

It is unlikely that it will be possible to avoid a fairly rapid depreciation of the ruble. And the more the ruble strengthens, the more powerful its fall may be

At the same time, both the Ministry of Finance and the Central Bank will be tied in their ability to conduct currency interventions. The Ministry of Finance - the “fiscal rule”, and the Central Bank - the declared policy of inflation targeting and floating exchange rate, economists believe.

These conclusions are confirmed by the fact that after the start of currency interventions, the ruble remained stable. It is obvious that there is currently increased speculative demand for Russian financial assets. “High yields on the domestic government debt market and the strengthening ruble are extremely attractive for operations such as carry trade. It is no coincidence that the share of non-residents in the OFZ market, according to the Bank of Russia, increased from 21% at the beginning of last year to 27% at the end of September (by 0.4 trillion rubles). In the balance of payments, this was reflected in an increase in portfolio investments in the secondary government securities market by more than $5 billion in the first three quarters of last year. In this case, we are talking about speculative operations, so at the end of the year a significant part of the money (almost $4 billion) left the market,” the report says.

According to experts, most likely, this year the Bank of Russia will continue to adhere to a tight monetary policy, and interest rates will remain at a relatively high level, which will continue to attract foreign investors to the domestic debt market. However, no one can cancel the danger of their sudden departure.

Where is the bottom of the Russian economy?

Commenting on the situation in the domestic economy, specialists from the Development Center note that in 2016 its structure changed little. The most significant shifts were the reduction in the share of trade (-0.5 percentage points) and construction (-0.3 percentage points) with weak growth or maintaining the existing share of other sectors.

The changes compared to pre-crisis 2013 are somewhat more noticeable. “Over three years, the situation in the raw materials and power sectors has improved against the backdrop of a decrease in the share in GDP of trade and construction “tied” to consumer and investment demand,” the report notes.

In this situation, Russia remains extremely dependent on oil prices. According to economists, the question of whether the Russian economy has pushed off the bottom will be resolved by itself if the price of domestic “black gold” Urals, which increased by more than $10 due to the decision of OPEC and other oil-exporting countries to limit the level of oil production, remains at the achieved level levels.

“With a non-declining oil price and growing exports, a slight growth in the Russian economy is guaranteed. According to our estimates, with oil at $50/barrel. and export growth of 1.7% in 2017, the economy will grow by 1.5% (of which all 1.5 percentage points will be due to the effect of rising oil prices), and at $55/barrel. - by 1.9%,” the report’s authors predict.

However, experts add that in subsequent years, if oil prices stabilize, economic growth under the inertial scenario may slow down again to 0.5-1.2%.

“Overcoming the crisis will become more difficult if oil prices do not remain at current levels, for example, due to increased shale oil production or a slowdown in global economic growth,” the Development Center emphasizes.

Everything can end

The head of the Center for Economic Research at the Institute of Globalization and Social Movements, Vasily Koltashov, also sees significant risks in the strengthening of the national currency.

“The strengthening of the ruble is fraught with an intensification of the economic crisis. And this is a paradoxical situation. On the one hand: rising oil prices and the strengthening of the ruble contribute to the solvency of the population; citizens will be able to buy more foreign goods. But on the other hand, this does not help to overcome the crisis. And rising oil prices do not return us to the situation that existed before mid-2008, when the economy was growing,” the economist said.

According to a report by the International Energy Agency, a significant increase in oil prices provided strong support to the Russian currency. In Europe, due to the cold snap, demand for oil increased significantly, and China increased imports by 27 percent.

“There are no internal reasons for joy from the strengthening of the ruble. As for external reasons, everything can break off at any moment and turn downwards. Perhaps this will happen in the form of a long-term decline in hydrocarbon prices, and therefore a weakening of the ruble. These two scenarios could have come true last year, and this year too. There are no objective reasons for the economy to emerge from the crisis and begin to recover. We are in limbo; the strengthening of the ruble should not deceive us,” Koltashov believes.

When to buy dollars?

Most economists agree that the dollar/ruble pair will not stay below 60 for a long time. In this regard, you can consider buying US dollars at current levels.

According to a review of the investment and corporate division of Sberbank, a fall in the Russian currency to 64 rubles per dollar may occur in the coming months.

“We believe that the new scheme of foreign exchange interventions may trigger the growth of the USD/RUB pair to the level of 64 (our current forecast for the end of the year) faster than we expected. The impact of such ruble weakening implies an increase in inflation of 1 percentage point, but these inflationary pressures will be counteracted by maintaining tight monetary policy for a longer time,” the review says.

At the same time, according to Sberbank CIB analysts, the Ministry of Finance’s foreign exchange interventions will not lead to a significant weakening of the ruble in February, taking into account the favorable seasonal dynamics of the current account and the relatively small volume of debt payments.

“However, the effect of currency purchases may increase in the second and third quarters, when the current account surplus will be small,” analysts say.

The report notes that the Central Bank is likely to delay the next key rate cut until June 2017 to allow time to assess how foreign exchange interventions affect consumer prices and inflation expectations.

According to the forecast of Sberbank CIB analysts, the regulator will reduce the key rate by the end of 2017 by 150 basis points to 8.5% per annum.

The current situation with the Russian economy, unfortunately, has not become much better today, so even extremely optimistic experts do not dare to talk about a quick stabilization of the situation with the currency. Today, the value of the national currency is in relative stability in relation to, but the data on whether there will be a devaluation of the ruble in 2017 worries many, the economy is influenced by many different factors and another disturbance can cause a cascade of such powerful “state reactions” that can be stopped will be almost impossible.

Devaluation is usually called the process of depreciation of a national currency when its price increases. It can be natural, that is, arise against the background of any financial and economic problems in the state, or it can be a consequence of some actions of the government apparatus aimed at stimulating this process (artificial). There are several examples in history of an artificial process of devaluation, and it must be said that some of them were successful, and some brought many problems to the authorities, but the situation that can be observed today is a natural process, Several factors led to its development:

• conflict situation with neighbors (Ukrainians);
• expansion of the country's territory (due to the annexation of the Crimean Peninsula);
• decrease in cost and decrease in sales volumes of “black gold” (although, frankly speaking, recently oil sales in the country have improved a little).

Of course, the conflict, which has been worrying Ukrainians for several years, can only become an indirect cause of the devaluation of the ruble in 2017, because the conflict led to Russia’s Western partners introducing sanctions against it, which significantly limited its financial capabilities, and this could become a serious threat for the national currency market. Previously, the economy and, accordingly, the stability of the national currency were influenced by China, whose GDP began to fall, but today it is already known that for this reason the depreciation of funds will not occur, because the market relations of Russians with China have today moved to a higher level, so it is possible believe that the price of oil will constantly rise due to this. The issues of annexation and financing of Crimea require a separate discussion, because it is known that the peninsula requires additional funds from the budget, because now it is part of the Russian Federation, and of course there are not enough of them, so the devaluation of the ruble 2017 in Russia, the latest news about which is of concern many citizens, may well be a consequence of a lack of budget funds, but experts are still confident that nothing like this should be expected.

What can you expect?

Despite all the prerequisites for the development of this problem, experts are confident that there will be no devaluation in 2017. Naturally, unforeseen circumstances may arise and everything will change, but leading analysts believe that Russia has enough untapped reserves, and its debts are not so high, so it is safe to say that this will not happen. The fact that a devaluation of the ruble in Russia in 2017 is possible is indicated by the country’s world rating, because recently it has dropped extremely, but the rating is falling not because of a lack of finance, but because of the introduction of sanctions, which, as we know, are going to be lifted. There can be no talk of lifting sanctions yet, but it is worth saying that the conflict in Ukraine, which became the reason for their introduction, is slowly beginning to subside, therefore, there are simply no further reasons for extending sanctions measures, especially since literally everyone is suffering from the imposed sanctions - including the Russians , and Westerners.

In conclusion, we can only say that there is no point in talking about a possible depreciation of the currency, because according to all forecasts this will not happen. In modern times, the authorities are finding means to restore the country’s economy, which means that the crisis is over and joyful events await everyone.