The value of the national currency and the price of oil are directly proportional.
Many in our country are wondering why the ruble exchange rate depends on oil. Why, if the price of black gold is reduced, the imported goods are getting more expensive, is it more difficult to get out to rest abroad? At the same time, the national currency becomes less valuable, and with it all the savings.
Why does the ruble depend on oil prices?
The price of the ruble is set depending on the proposals for the euro and the dollar on the Moscow Exchange. However, there are many factors that influence the fluctuations of the currency market. The question often arises, why the ruble depends on oil, and not on gas? Blue fuel also forms the price of the ruble, but to a lesser extent.
The Russian economy and its budget are dependent on the price of raw materials. Half of the treasury income is formed from the profits that the country receives by trading in oil, gas and metals.
The ruble exchange rate depends on the prices of energy resources that form the export of the Russian Federation. They determine the state of the current account of the balance of payments.
From this question, no less logical is formed: why does the ruble depend on oil and the dollar does not? After all, the United States also has hydrocarbons. And their oil fell in price as swiftly as ours.
The fact is that the ruble is a more commodity currency. The United States in this sense makes more money. Indeed, with the development of various sectors of the economy, the national currency is easier to stay afloat. Therefore, the dollar is more stable and less prone to crisis fluctuations.
The reasons for the cheapness of oil
To understand why the ruble depends on oil, you need to understand what factors form the price of hydrocarbons.
Several factors led to the rapid fall in the price of black gold on a global scale:
- The main consumer in the global hydrocarbon market is China. The period of intensive growth of the economy of this giant has passed. Now China is not developing at such a furious pace, therefore, it needs less raw materials.
- Manufacturers of cheap shale, the United States, dumping world prices for minerals, in turn, monopolists in the market lower prices as much as possible to squeeze out a competitor.
- The recent lifting of sanctions against Iran has led the country to increase oil production. However, OPEC members also do not want to slow down the pace of black gold mining.
A surplus has formed in the hydrocarbon market when supply exceeds demand. Now the buyer dictates the price to the market, thus the price is reduced.
Preconditions for rising energy prices
The increase in oil prices, observed some time ago, created certain prerequisites for a more or less stable ruble. In general, over the last period, the national currency is kept in one corridor. This is to the question of why the ruble depends on oil. Such a small stabilization is caused by the recent agreement of the OPEC member countries. Large exporters of black gold pledged to slow down hydrocarbon production.
The situation temporarily stabilized, and the price of oil grew a little, allowing the national economy to breathe a little.
How to save the national currency?
In fact, there are not so many ways out of the oil crisis, pushing the ruble to the bottom, and swinging the national economy.
The first thing, and this is obvious, is to wait for the fuel price to rise. The question is that no one knows when the price of oil will become adequate. After all, Russia is not the only country mining black gold. In addition, technologies that provide alternative energy do not stand still, and this, again, hits the demand for oil, respectively, and prices.
A more progressive option is to develop other sectors of the economy. The idea of import substitution in this sense is very helpful. Now we are not just consumers of the goods that have been delivered to us from abroad. The country creates these benefits themselves, using its own resource, including human resources. This is not a one day strategy. With such a development, the question is: “Why does the ruble depend on oil?” will not be so sharp. This strategy will make the domestic currency more stable, and citizens - more secure socially.
Devaluation
Russian budget revenues fell sharply after the collapse of oil prices. Adjusting the national currency allows you to balance the country's economy for some time.
The longer the ruble is able to stay in one corridor, the less consequences the country's budget faces. The Russian economy is very dependent on imports, so the dollar, being in the range of 55-60 rubles, does not allow high inflation.
In general, the heat in the foreign exchange market has been reduced due to import substitution. This strategy directly stimulated the agricultural sector. Domestic products can now compete in price and quality with imported ones. A sharp strengthening of the ruble is not profitable for the same reasons.
Also, there is another tool that the Central Bank of the Russian Federation uses - an increase in the interest rate. A high interest rate strengthens the ruble, as it attracts market participants to keep money in domestic currency.
Stock speculation
It's no secret that they earn on exchange rate fluctuations. Very often, serious financial organizations and banks are involved in the game process. Operating in large amounts, participants can significantly affect the redistribution of currency forces, because this way you can change the supply and demand. Small players, trying to get used to, will only unbalance exchange rate fluctuations.
It is difficult to influence the US dollar, because trillions are launched into the world system. The mass of the ruble in world circulation is relatively small. In principle, it would have been easy to collapse, if not for episodic interventions by the Central Bank of the Russian Federation.
The Central Bank has foreign exchange interventions and monitors the adequacy of changes in the domestic currency. By selling interventions, the ruble is being strengthened. Buying dollars - reduce.
In the early 2000s, when the price of oil was extremely favorable, the Central Bank bought dollars in reserve.
Why does the ruble depend on oil, and not on gold?
Now in the world there are almost no countries that would tie their currency to gold reserves. Based on realities, one ruble contains about 4 gold kopecks. For example, the US dollar contains about 3 gold cents.
Earlier, when money was minted from alloys containing gold and silver, they themselves were secured, but for almost 50 years, the country's currencies and gold reserves have gone apart.
At the moment, Indian rupee is the leader in terms of gold supply, which is provided by gold at 7%.
Since the domestic currency is weakly backed by gold, there is no need to talk about dependence on gold reserves.
The reasons for the jumps and falls of the Russian currency can be very diverse. Often they are difficult to analyze. Maybe a little time will pass, and the question of why the ruble depends on oil will not be so relevant.