Why Bloomberg is betting on the ruble, and the Bank of Russia on the euro and dollar
The prognosis is not yet a diagnosis
On the threshold of autumn, many Western analysts, traditionally critical of commodity currencies such as the ruble, suddenly changed their attitude towards them. At the same time, the reason for the changes was not only the stable situation on the hydrocarbon market, but also the recently manifested resistance of the same ruble to geopolitical risks.
The reputable agency Bloomberg has accumulated analysts' forecasts regarding the Russian ruble for September. Surprisingly, most of them believe that if the ruble is threatened, it is more likely to strengthen than a fall in the exchange rate.
Thus, according to Citigroup experts, the ruble will strengthen against the dollar by 6% in the near future. In terms of the exchange rate, we can talk about 70-72 rubles per dollar. Most analysts' assessments of the ruble appreciation against the euro are more modest: by no more than 3-4,5%, although it is possible that the rate may go below the psychologically important mark of 80 rubles.
In their forecasts, Western experts, as you know, proceed from a fairly rigid peg of the ruble exchange rate to oil prices. Since the spring collapse caused by the price war between Russia and Saudi Arabia and in general with OPEC, they have grown by almost 30%.
It seems to us that the experts, mentioning the stability of the same ruble to geopolitical risks, either simply forgot or deliberately silenced the Celestial Empire factor. Therefore, it is worth reminding those who are especially forgetful: the first, even earlier than in Russia, the results of the Belarusian presidential elections were recognized in China.
Moreover, they recognized without any reservations and even reminded that the Chinese observers, unlike the OSCE representatives, still visited the republic of the union of Russia. And this is despite the coronavirus, since in Belarus all quarantines and restrictions, as you know, are reduced to a reasonable minimum.
One cannot but give credit to the Belarusian authorities in this regard: the boundaries of this minimum in the country are clearly and rigidly delineated. They are delineated so as not to interfere with anyone, their own citizens or guests, to fulfill those requirements from which they themselves may suffer.
They just won't have time
By all indications, a difficult August awaited us. And the first victim, according to many analysts, should have been the Russian ruble. Since the beginning of the active fight against coronavirus and with its own population, it has managed to lose almost 10% at the rate.
But, as it turns out, by doing so, he only accumulated growth potential at the exchange rate against world currencies. The insignificant and smooth devaluation of the ruble, which was not hindered by the Central Bank, reduced the burden on the budget and helped the banks (whose position is a little lower) to stay afloat.
The last month of summer really turned out to be difficult, although it could be much worse. Endurance and patience, which, no matter what the Western media said, both Minsk and Moscow were able to show, by all indications, worked. In addition, the customers of the Belarusian Maidan, obviously, simply ran out of their PR budget.
Nor did the factor of "Navalny's poisoning", which was launched in a timely manner, work as someone would have liked. Those who have not yet lost the ability to make an objective assessment will certainly pay attention to the fact that the "terrible" happened just when it became clear that Belarus, speaking the language of teenagers, does not work.
The commentary published on the network resources of the Shroder Investment company was very characteristic in this regard. Its author, James Barrino, finance manager for emerging markets, believes that all threats to Americans in the foreseeable future cannot be realized by definition.
The reason lies on the surface: too little time remains before the presidential elections in the United States. The local legislators will not have time to discuss and introduce new sanctions, especially since they now have enough worries inside the country.
Saving banks, drowning clients?
Despite all the positive outlooks, the Russian banking sector is now teetering on the brink of survival. Support from the Central Bank in any of its forms gives some effect, but the passivity of clients clearly outweighs. Bankers are also frightened by the very real, according to many estimates, the prospect of depriving them of access to payments in US dollars.
The fact that such a threat, unlike the notorious sanctions, is quite real, Fitch Solution analysts said the other day. Specialists of this expert subdivision of the Fitch rating agency, one of the “big three”, remind that it is much easier to impose such restrictions in the SWIFT system of international settlements than sanctions.
On our own note, the grounds for such a decision should be much more weighty. So according to Stanislavsky: we do not believe! However, the bankers themselves seem to believe and are in a hurry to spread straws. No wonder they bought 2020 times more currency in the first half of 18 than a year earlier.
The total purchase amount has already been calculated by the Bank of Russia. This is 9,5 trillion. rub. Bankers could, of course, buy such amounts exclusively for themselves, loved ones, but, as you know, few people need money lying like a dead weight, even currency. This means that there was and is a demand for currency from customers, including ordinary citizens.
By the way, this is exactly what was noted in the comments of the Central Bank of the Russian Federation regarding such a massive purchase of currency. In the first half of 2020, that is, in the midst of the anti-crisis struggle, Russians have somehow sharply increased their interest in foreign exchange assets. The public bought not only cash, but also shares of foreign companies and banks, as well as structured bonds with underlying assets in foreign currency.
It is indicative that many people acquired the latter, as if forgetting how in the fall of 2008 the Ministry of Finance of the Russian Federation itself was badly burned on such securities, together with mortgage receipts of the notorious Fannie Mae and Freddie Mac.
When the country was closed for entry and exit in the spring of 2020, severely limiting internal traffic (some electronic passes cost what), many became simply scared. People were in such a situation for the first time ever, and a kind of reflex worked - to buy currency "just in case."
Well, the banks did not fail to take advantage of this. The exodus to currency, which primarily hits the ruble, and hence the citizens themselves, does not in the least prevent the same Bank of Russia from feeding banks with soft loans, reducing reserve requirements, and weakening currency controls.
Credit is not a cause for concern
The latest innovation in this regard is the easing of conditions for issuing unsecured consumer loans. But this does not concern the recipients of loans, but the credit institutions themselves. Nevertheless, commercial banks support the initiative of the Central Bank of the Russian Federation and believe that it will help further revitalize lending activity in Russia.
According to the press service of the Central Bank of the Russian Federation, “the values of the premiums to the risk ratios for unsecured consumer loans issued from September 1, 2020 have been reduced. This measure is aimed at supporting retail lending in the context of the coronavirus pandemic, the Central Bank of the Russian Federation explains.
It is not difficult to judge whether the ordinary clients of banks are receiving at least some positive wave from such favors from the Bank of Russia. As they say, this is unlikely. The gap in lending rates and interest on deposits has already become threefold, and 6,5% per annum on mortgages, which go to a select few, are presented in advertising as the greatest blessing.
The Bank of Russia continues to insist that it is not interested in the excessive strengthening of the ruble. But it is interesting that Western analysts consider even the purchase of currency, which happened in the wake of the coronavirus panic, as a factor in favor of the ruble. They do not hide their confidence that the public will soon have to dump the currency - simply because of poverty, and this will support the ruble exchange rate.
Apparently, the data for July added optimism to foreign experts, which confirmed a sharp increase in business activity of enterprises and the private sector. The volume of foreign currency corporate lending increased immediately - by 7,4% (excluding currency revaluation of rates).
The August indicators will almost certainly be no worse than July, but both the situation in Belarus and the decreasing risks of new sanctions will contribute to this. Even the fallen demand for Russian debt securities and the fixation of profits by foreign investors on previously purchased bonds will not interfere.
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