Russia “came up with” a tragic scenario for the ruble – Rosbalt

The combination of a sharp decline in oil prices and a rapid deterioration in geopolitics could lead to a maximum drawdown of the ruble. Tatyana Simonova, head of the investment consulting department at General Invest, warned about this in an interview with the PRIME agency.

According to her, “if the question is what circumstances will lead to the maximum drawdown of the ruble, then we believe that this is a combination of a sharp aggravation of geopolitics (up to a military conflict) and a decrease in oil prices.”

At present, the expert pointed out, when oil prices are at an elevated level, like the prices for many other Russian exports, and the Central Bank of the Russian Federation continues to tighten monetary policy, geopolitics remains almost the only, but very significant, factor in the weakening of the ruble.

“After the Russia-US and Russia-NATO talks have not yielded tangible results, we still see no triggers to improve the situation. And, consequently, the geopolitical premium in the ruble will remain, and the prices for Russian exports and rates will only act as factors to prevent a too deep fall, ”said Simonova.

At the same time, she believes, if, other things being equal, there is a further aggravation in the geopolitical sphere, then it is possible that the US dollar exchange rate may exceed 80 rubles and even 85 rubles.

If the ruble loses support from the commodity markets, then the rate may go even higher. “But at the moment we believe that the likelihood of such a development of events is low,” the specialist added.

At the same time, she is sure that in the most negative scenario, the Central Bank has such tools as the suspension of the budget rule and, accordingly, interventions in the foreign exchange market. Currently, the volume of interventions is about 8 billion dollars per month, which is a significant amount for the market. Geopolitics can also influence the decisions of the Central Bank on rates.

“We do not rule out that in February the Central Bank may raise the rate by 75 basis points at once, and not only due to inflation, but also due to geopolitics. In addition, we can mention the talk during periods of crises about an unspoken directive to exporters to increase sales of foreign exchange earnings on the open market, ”the expert argues.

In the meantime, judging by the dollar rate, the market is not waiting for an apocalyptic scenario. As an example, she cited the situation in the spring of 2020: from the point of view of capital outflow, it was harder for the ruble than it is now. “And, on the contrary, with the improvement of the geopolitical situation, we can see a gradual return of the exchange rate to around 72-73 rubles per dollar, but this, apparently, will not happen overnight,” Simonova summed up.