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The exchange rate of the US dollar in the course of trading on the Moscow Exchange on Friday reached 77 rubles, while the euro jumped to 88 rubles. Moreover, the weakening of the Russian currency may continue further – up to a sharp collapse and currency panic, Rambler/Finance reports, citing estimates by EXANTE analyst Vladimir Ananyev.
According to him, “the tightening of US rhetoric against the backdrop of negotiations on (guarantee) security in Europe suggests that Russia is likely to be subject to (tougher) sanctions.” “In addition, if there is no progress in the negotiations, then Russia will be forced to take retaliatory geopolitical steps, and this is a new round of escalation. The market is well aware of this,” the expert said.
Moreover, he does not exclude the risk of a local military conflict. “The ruble may well fall further if military-political steps follow. The reversal will be determined by success in the negotiations, but there has not yet been one, although the parties are trying to find reasons for optimism. You should carefully look at the level of 80 rubles per dollar. If the exchange rate steadily consolidates above this mark, then the path to both 85 and 90 rubles per dollar will be open. It is difficult to predict specific levels now, since they depend on events in geopolitics, and they are unpredictable,” Ananiev emphasizes.
He recalls that “after the Crimean events (and the annexation of the peninsula to Russia in 2014 – ed.), when the civil war began in Ukraine and (were introduced) anti-Russian sanctions, the ruble fell by half in six months.” “Similar mathematics can be applied to the current moment,” the expert believes.
He warns that in this case, a currency panic is quite guaranteed. Last time, against the backdrop of a sharp fall in the ruble exchange rate on Black Tuesday, December 16, 2014, Russians attacked currency exchange offices and devastated household appliances and electronics stores out of fear of higher prices for imported goods.
Source: Rosbalt
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