During the first few months of 2014, the ruble weakened against leading world currencies, including the euro. How will the single European currency behave relative to the Russian one in the future? Should we expect that the euro will continue to grow? It all depends on many factors of an economic and political nature.
Regulator and corridor
What we see on the screens of the exchange office is the result of foreign exchange trading conducted with the participation of the Central Bank. The value of the displayed numbers is the totality of the impact of a large number of financial mechanisms, including those that are used by global economic institutions, including the Central Bank. One of the instruments of the influence of the main bank of Russia on the market is an acceptable currency corridor. If the ruble is significantly underestimated or overvalued, the Central Bank begins to buy or sell money in order to maintain the necessary values. There is a currency intervention in order to prevent too much depreciation of the ruble.
After its volume exceeds 350 million dollars, the corridor within its borders shifts upwards by 5 kopecks. Such actions by the Central Bank are commonplace for the economy, but in the first months of 2014, such movements were mostly one-sided. The currency corridor shifted, signaling a steady weakening of the ruble. The figures are eloquent: in comparison with the values of the previous year, the Russian “wooden” rate against the main world currencies fell by 10 percent. The forecast for the growth of the euro and the dollar seems obvious.
Economic growth factor
In recent years, the ruble, as a rule, has moved up and down on currency scales almost in direct correlation with oil prices. Now, however, its course depends on other macro indicators. First of all, this is economic growth per se . Even though the price of a barrel of oil is stable at $ 100 or more, Russia's GDP is growing extremely slowly. The forecast for 2014 is an increase of about 1.5 percent, which is lower than the world average.
Low rates will inevitably affect the ruble exchange rate against leading currencies. The growth of the euro in 2014 in relation to the Russian banknote, thus, may still be about 10 percent. At the same time, the practical significance of the ruble to euro exchange rate for ordinary Russian citizens, as experts say, is low: the price of most goods is expressed in national currency. In contrast, for example, from the 90s, when the price tags in a large number of stores were in e. ". It is likely that only imported goods will rise in price, but not more than by the same 10 percent.
Authorities remain optimistic
At the same time, the state represented by the Ministry of Finance does not expect special problems from the marked depreciation of the ruble in the foreign exchange market in 2014. According to officials of this department, for serious fluctuations in the exchange rate there are no special economic grounds, and its possible values, one way or another, will remain within the corridor established by the Central Bank. At the same time, the Ministry of Finance is avoiding talking about the prospects for the reverse trend: whether the ruble will strengthen not the euro and the dollar.
Some experts are sure that the Russian foreign exchange market has gained stability in recent years. In this regard, since 2015, the Central Bank plans to abandon monitoring of the ruble exchange rate and switch to inflation targeting - adapting the economy to the planned indicators of consumer price growth. In fact, this means letting the national currency into free float, but taking into account the positive trends of recent years, strong fluctuations should not occur, according to the financiers' expectations.
Business is careful
Unlike the sentiments prevailing in state institutions, private corporations, and especially banks, prefer not to be so optimistic. According to a number of experts who are not related to the structures of the Ministry of Finance, the weakening of the ruble is a systemic phenomenon. It began not just at all, but several months ago. Oil prices, however, do not directly affect the ruble. The thing is different: the demand for the national currencies of developing countries is falling, and, conversely, there is an increase in the popularity of the dollar, an increase in the euro.
In Russia, by the way, the structure of most sectors of the economy allows us to attribute the country to the marked type. This trend is global and associated with the global crisis, after which emerging economies are not developing very actively. In addition, the situation is complicated by the fact that investors, as soon as the market begins to “jump,” immediately sell rubles on the stock exchange. Thus, the psychological factor influences the course of the national Russian currency. Investors traditionally consider the ruble unstable, and investing in it - risky.
But it is better to save in rubles
Despite the negative trends in the foreign exchange market, experts do not advise Russians to save in dollars and euros. The fact is that our banks still offer high rates on ruble deposits - about 10% per annum. With regard to foreign currencies, such values have long ceased to exist. If, for example, we assume that the ruble will depreciate even by another 10%, then the investor will not lose anything. In relation to current inflation rates, such a deposit will in any case turn out to be a winning option for storing money.
A certain percentage of the amount of savings will also be lost on conversion. However, this “math” is not entirely fair if a person is going to go live abroad or receives a salary depending on the exchange rate of foreign currencies. Given the fact that the euro will increase, the year 2014 is quite attractive for the accumulation of money in this currency for the purpose of moving abroad.
It’s the business of the Europeans
If the ruble exchange rate largely depends on the policy of the national regulator - the Central Bank of Russia, then the growth of the euro, in turn, is largely determined by the work of the European Central Bank. Now this financial institution prefers a relatively mild approach to market regulation and does not gravitate to unusual methods of influencing the euro. Such a policy is facilitated by a slight improvement in the economies of the Eurozone in early 2014. If this trend continues, then the exchange rate of the single currency in relation to other world banknotes is likely to grow.
Regarding the mutual disposition of the euro and the ruble, the factor of the American dollar will play a role here. The exchange rate of the Russian currency directly depends on the other two, currently more globally significant. It is unlikely that the euro / dollar exchange rate in 2014 will deviate significantly from the value of 1.4 points (the regulatory Central Bank will not allow more severe fluctuations). Therefore, if the American currency reaches, for example, 36 rubles, then the price of the European currency will not exceed 50.
Forecasts
Some banking market experts expect the ruble to strengthen by the end of 2014, and therefore citizens should better not get carried away with the rush of buying dollars and euros. The reason for such overt optimism is in the policy of the Central Bank. The negative trend that accumulated in 2013 should thus change its direction in mid-2014. Among the forecasted figures - 33 rubles per dollar, 43.5 - per euro. This is also due to macroeconomic factors: in developed EU countries, an increase in the level of demand for goods manufactured in Russia is expected, as well as an increase in oil demand. However, the question of whether there will be a pronounced increase in the euro does not affect forecasts for 2014.
There is also a version that in the current economic situation there is no need to devalue the ruble (as happened, for example, in 2008). Then there was a significant decline in GDP, unemployment increased sharply, and therefore devaluation has become a saving straw for many sectors of the Russian economy (especially for export-oriented). In addition, experts believe that at that time the Central Bank spent about $ 200 billion on devaluation, and today it will be better to direct available funds for other purposes.
Geopolitics
As you know, "money loves silence." Therefore, any trends in the global economy are tied to events on the political plane. Today, the central theme throughout the world is the situation around Ukraine. If the tension in relations between Russia, Europe and the United States falls, then the exchange rates of national currencies are waiting for a pullback to the values of January-February. At the same time, even in this case, one should not expect a strong appreciation of the ruble against world currencies, since, in addition to the political factor, the influence of economic trends remains significant, the strengthening of the dollar and the growth of the euro are possible. 2014 can largely determine the main vectors of geopolitics for the near future.
The main thing is that the market move
The most unpleasant situation on any currency exchange is stagnation. Market movements, whether it is the growth of the euro or the depreciation of the ruble, give signals to investors to do something, make any decisions. At the same time, as experts say, to build long-term forecasts regarding exchange rates is a thankless task. There is a very high probability of not guessing the direction, a lot depends on factors whose action is very difficult to foresee. It is important that market participants also have access to reliable information about the processes taking place in the economy.