Analysts explained the reasons for the weakening of the ruble and gave a forecast for December

Among the main factors behind the weakening of the ruble since the beginning of winter is the decline in oil prices, Natalia Vashchelyuk, chief analyst at Sovcombank, told Izvestia on December 3.

“Since the end of November, Brent crude prices have been near their 2022 lows,” she explained.

In addition, the course was affected by the uncertainty about the sanctions, the expert added.

“The countries of the European Union announced the imposition of an embargo on offshore oil supplies from Russia from December 5th. The introduction of an oil price ceiling is also being discussed, and Russia, most likely, on its own initiative, will stop oil supplies to those countries that agree on it, ”she said.

Vashchelyuk clarified that it may take time to reorient exports to other countries, which could reduce export earnings and form expectations for the weakening of the ruble in the coming months among foreign exchange market participants.

Another factor is the restoration of imports.

“According to various estimates reported by the media, imports to Russia are gradually recovering from the local minimum reached in April 2022,” the analyst said.

Also, according to her, problems with gas exports due to the accident at Nord Stream and the calendar effect affected the ruble exchange rate: the end of the tax period at the end of November.

According to Vashchelyuk’s forecasts, in the baseline scenario, a slight weakening of the ruble is possible in December in the face of a decrease in the balance of foreign trade operations. Thus, the dollar can stabilize in the range of 61-63 rubles, the euro – 64-66 rubles, the yuan – 8.7-9 rubles.

“In the optimistic scenario, Russia will be able to redirect more exports to friendly countries with a lower Urals discount to Brent. Then the dollar will probably be about 60 rubles. In a pessimistic scenario, there may be problems with oil supplies to friendly countries, then the ruble in the coming months may move into the range of 65-70 rubles per $1 (depending on the scale of price reduction and volume of supplies),” the analyst emphasized.

At the same time, according to the head of the analytical department of Zenit Bank Vladimir Evstifeev, the short-term outlook for the ruble depends on the dynamics of oil prices and the volume of oil sold abroad.

“With quarantine restrictions in China, which negatively affect business activity, it will be somewhat more difficult and longer to replace exports to the EU with Asian countries. Against this background, the restoration of imports is increasingly affecting the balance of power in the domestic market,” he said.

According to the analyst’s basic forecast, the dollar exchange rate at the end of the year will be 64 rubles per $1, 67 rubles per €1 and 9.2 rubles per yuan. He cited a moderate decline in export earnings and smooth geographic diversification as the main factor.

“The rates of 60 rubles, 63 rubles and 8.5 rubles, respectively, may look optimistic. In this case, Russian oil prices should return to the range of $70-75 per barrel, and the EU should not reach a consensus on the maximum price of oil from the Russian Federation,” the analyst added.

In the pessimistic version of the forecast, the exchange rates could be 68 rubles for $1, 71 rubles for €1 and 9.7 rubles for the yuan, he said.

“In this forecast, the key factor may be a 10% drop in oil production in Russia in December (to 9.8 million barrels per day) and weak ability to replace falling volumes of European supplies,” Evstifeev explained.

On December 1, financial expert, author of the Economism Telegram channel, Aleksey Krichevsky, expressed the opinion that no major changes in the exchange rates of the dollar and the euro against the ruble are expected in December, but weakening to 62–63 rubles per $1 and to 64–65 rubles is possible for €1.

At the end of May, the American television channel CBS called the ruble the most stable and efficient currency of this year.

.

Leave a Reply