Russia has predicted what will happen to the ruble in February – Rosbalt

The Russian national currency is now significantly undervalued due to country risks, which have increased significantly due to the deterioration of the geopolitical situation. Dmitry Babin, an expert on the stock market at BCS World of Investments, said this in an interview with PRIME.

According to him, due to the great geopolitical uncertainty, it is difficult to give even short-term forecasts of the dynamics of the ruble, but if there are signs that Russia and the West have embarked on the path of establishing bilateral relations, we may see the strengthening of the ruble.

According to the analyst, against the backdrop of geopolitics, other factors have significantly weakened their influence on the ruble. In this regard, Babin doubts that the February meeting of the Central Bank, which is likely to decide on a further increase in the key rate, will have a tangible impact on the Russian currency. “However, raising the key rate by 0.75 percentage points or more will provide some support to the ruble,” the expert admits.

At the same time, he hopes for high oil prices. As the analyst pointed out, maintaining high quotes is also able to smooth out the negative impact of the geopolitical factor. And if the geopolitical risks subside, the favorable commodity situation will ensure the rapid strengthening of the ruble.

Meanwhile, experts interviewed by RIA Novosti do not expect a 50% fall in the ruble now, as in 2014, against the backdrop of possible new sanctions. The situation with a possible outflow of capital due to the next sanctions is now much more comfortable for the ruble than in 2014, besides, it is more favorable on the oil market, they say.

Earlier, the White House said that if the situation around Ukraine worsens, US financial sanctions against Russia will be harder than in 2014, when the ruble fell by 50%, and the Central Bank spent 25% of its reserves to support it.

In particular, the dollar exchange rate from June 2014 levels of 34 rubles jumped as much as possible in December of the same year to 80 rubles, but closed 2014 at the level of 56 rubles. However, it should be noted that during the period under review, oil slipped from $112 per barrel to $57 (Brent).

Meanwhile, Egor Susin, Managing Director of Gazprombank Private Banking, recalls that the main factor for the Russian currency market in 2014 was the surprise factor. “Russia’s external borrowings were quite large (more than $700 billion), and their structure was heavily biased towards short-term loans. At the same time, until 2014, many economic entities converted ruble loans into foreign currency against the backdrop of record oil prices and good prospects for the ruble. However, everything quickly changed against the backdrop of a sharp outflow of capital, ”the expert argues.

Now, he states, external borrowing is not so large – no more than $500 billion, while international reserves are much higher than in 2014. “Companies and the state, in general, have more foreign currency assets than external borrowings. Therefore, the outflow of capital from the country in the event of new sanctions carries fewer risks than in 2014,” Susin is convinced.

In his opinion, “the probability of a depreciation of the ruble by 50% in the event of new Western sanctions is already small.”

In addition, Sergey Suverov, investment strategist at Arikapital Management Company, adds that it is worth considering the oil factor, which now differs from the situation in 2014. “Then, in the context of the shale revolution in the United States and a sharp increase in the supply of American oil, the balance of the global hydrocarbon market was upset, and the price of oil fell by 2 times, setting the ruble to depreciate,” he notes.

We also note that back in November-December last year, the world media was filled with the topic of the alleged Russian invasion of Ukraine and the sanctions that should follow. According to the authors and experts of these publications, a sign of “invasion” is the concentration of Russian military equipment in the regions bordering Ukraine. Among the likely sanctions are both the shutdown of the Nord Stream 2 gas pipeline, as well as restrictions against Russian energy companies, and the shutdown of the SWIFT system of “fast” financial settlements.