Review article. The article explains in detail why the ruble is falling in Russia. On the modern Russian ruble it should be written: “provided at market rates.” “The Central Bank of the Russian Federation will exchange the ruble at the market rate.” We often criticize the dollar for its lack of security, but the ruble is no less virtual because it is secondary.

On the Soviet rubles it was written: “state treasury notes are provided with all the property of the USSR Union.” Or this: “Bank notes are backed by gold, precious metals and other assets of the State Bank.”

On the Russian imperial money there was the following inscription: “The State Bank exchanges credit notes for gold coins without limiting the amount (1p = 1/13 imperial contains 17.424 shares of pure gold).”

We often criticize the dollar for its lack of security, but the ruble is no less virtual because it is secondary. The dollar in the “market system” is issued by a narrow circle of interested parties (the Federal Reserve System), and the ruble acts as a “derivative security.” This is the tragedy of the ruble and everyone associated with it. A classic example of “colonial unequal exchange.” The ruble is just an exchange commodity, the rate of which is determined by “market exchange”. That is, how much the ruble is worth is determined not by the wealth of the Russian Federation and not by the consolidated labor of citizens; how much the ruble is worth is determined by a very narrow circle of people who control the (currency exchange) market. This is the main reason for the fall of the ruble, and not at all the decline in oil prices. The decline in oil prices is a reason, not a reason.

Now the position of the Russian national currency in the world currency market is unique, since at the moment it is the weakest currency not only against the American dollar, but also against all others. Why? Because “the market decided so.” Why did the market decide this? Because the price of oil is falling and “stock market speculators” are attacking. Why is the price of oil falling? Because those whom we personally do not know decided so. In this case, why do those “whom we do not know” determine how Russians should live? Because “the market decided so.” That is, “in the market” they decided to rob us, and the local Central Bank (as a market maker) ensures this through inaction. So far it's working out like this.

Comparing the dynamics of ruble devaluation over almost 6 months, we obtain the following (approximate) characteristics: value against the US dollar (-63%); to the same commodity currencies as the ruble: to the Canadian dollar (-43%), Australian dollar (-37%), Norwegian krone (-33%), Kazakh tenge (-64%).

Relative to the currencies of the BRICS “allied countries”: to the Brazilian real (-30%), Indian rupee (-48%), South African rand (-46%), Chinese yuan (-54%). Regarding the currencies of various neighboring countries: Lithuanian litas (-39%), Turkish lira (-46%), Belarusian ruble (-51%), Ukrainian hryvnia (-22%), Kyrgyz som (-46%), Tajik somoni (-56%), and so on and so forth. Thus, the collapse has already “successfully” taken place within six months. Why? Because “the market decided so.”

The official position of the Russian regulator is that the ruble is falling because the price of oil is falling. This is partly true, but oil fell by (-43%) and not by (-63%). In addition, oil is falling, for example, in Kazakhstan. However, for some reason this did not affect the exchange rate of the Kazakh currency. Why? “Because the market decided so.”

The most superficial reasons why the ruble is falling:

0). They took on the Russian Federation “in full” (an economic war on a full scale) and hit the traditional weakest sector for the Russian Federation – the financial sector. Traditionally (since the collapse of the USSR) this sector of the Russian Federation has been staffed by liberals – non-professionals (“talking heads”).
1). For some reason, the leadership of the Central Bank is interested in weakening the ruble. We will leave the question “why” until we receive more detailed information. So far it looks like local assets have been zeroed out compared to the promising financial capabilities of foreigners. “Safe haven” for “foreign ocean liners”(?).
2). In the Russian Federation, a “pure dollar class” has emerged, useless for the state, but very important for the issuer of the dollar. This class (“to whom is war, and to whom mother is dear”), needs not so much stability in “this state” as ultra-fast profit. In “this state” they live only on a business program. Life is there, work is here.
3). The Central Bank is run by non-professionals (outside of any political preferences, simply based on the quality of their skills).
4). The Central Bank is run by “foreign professionals”. As an option.
5). Some of the locals in the West have developed a “loan pyramid”, but the time has come to give back. This is what other interested parties take advantage of.
6). Another redistribution of assets is underway, creating an advantageous starting position for foreigners.
7). The ruble is being attacked by “overseas speculators” through local agents. “Overseas speculators,” of course, not on their own, but as connected structures of certain centers of political decision-making. Local agents are really “with the market” and not with the state.
8). It seems that the Supreme Commander-in-Chief is simply being misled by some “economic courtiers” about preserving gold and foreign exchange reserves in such an exotic way (“floating the ruble”). I wonder, in this case, why the ruble floats in only one direction(?).

“The price of oil is falling” will be the answer for all occasions. Question: Who makes the market(?), numbers make people or people make numbers(?). You need to understand that devaluation is not only the success of exporters and commodity producers, but also the ghost of the “Weimar Republic,” where workers received wages several times a day in order to have time to spend the money in the morning, because in the evening it was already different money. To put it simply, the enemy (and we are waging an economic war on a full scale with a non-mobilized “market economy”), seeing the degree of adequacy and professionalism of the Russian “government monetarists,” simply caught courage.

Why, wait a minute, should the ruble be regulated(?), the market-minded liberals will ask. Why do anything at all outside the postulates of “liberal science”(?). The market will judge and arrange everything. He judges and sets, but you just need to remember that the market is a tool that is made by specific people for specific purposes. The Soviet Union wanted to play according to “market conditions” and it disappeared. Well, let's repeat the trajectory with the Russian Federation(?). The market is a two-fold instrument, and it not only fills; By blindly following the recipes of the “market”, the state can easily perish. It's a no brainer that we are in an economic war. It is clear to him that, under the conditions of the war, they will go through the “achievements” of the collapse of the USSR - through the “free market” and that means they will lose oil, gas, gold, the ruble, and so on. This actually needed to be understood the day before yesterday, approximately in March-April.

Even without the “nationalization” of the Central Bank, there are tools in the arsenal. For example:

1). Only holders of foreign economic contracts or those who have agreements to repay loans to foreign banks buy currency on the exchange.
2). A ban is introduced for banks to change their currency positions during trading (fight against speculation).
3). The mandatory sale of dollars from a portion of exporters' proceeds is determined.
4). The Russian Federation is urgently reducing its position in American government securities, the proceeds are going in tranches to stabilize the exchange rate of the Russian national currency.
5). The Russian Federation limits the demand for the dollar by a complete ban on the purchase of American products (restricts imports).

A full-scale crisis of the banking system (which is what “our Western partners” are trying to achieve). The goal is to increase the dollar exchange rate until the leadership of the Russian Federation throws out a “white flag” in the form of the necessary negotiating position.
An internal crisis of non-payments (mutual settlements) is possible;
The real purchasing power of the ruble is rapidly declining, prices are rising, that is, the incomes of the “office and other proletariat” are rapidly declining, which, as soon as the situation finally matures, interested people will definitely call out into the streets. That is, due to the inaction of the regulatory body, there is a powerful increase in the base of “social protest”.
Image loss of power. Basic idea: If the regulatory authorities are not pitted against each other, it means that they are specifically weaker than the “speculators”. The average person, as you know, has no fatherland.

Thus, “speculators” (by action) and the Central Bank (by inaction), like a hammer and anvil, translate economic problems into political ones. And why? Because “the market decided so”(?).

There is no doubt that the leaders of the current monetary policy and VIP regulators of the Central Bank will be fired. The only question is how much the ruble will be worth by then. It is clear that the ruble will not strengthen until the New Year. The interesting things will begin later. You can place bets: will serious Western guys sacrifice (the ruble will continue) their Russian liberal partners or not (?). Apparently they will donate, because these are the stakes now. This infantry is not particularly needed, because it is infantry. You can collect as many of these as you like.

The SVR recently reported (Fradkov) that attacks on the ruble were carried out by Western investment funds. Question: where do Western stock exchange operators get such a huge quantity of the local instrument - the ruble (?). More precisely, who lends rubles to “Western partners” to play within the country?

In fact, a full-scale collapse is being imposed on the commodity economy (price war and stock speculation) in a completely virtual way. The Central Bank verbally puffs up and passively observes. Meanwhile, the question is extremely simple: the interests of the state or the interests of the “free market”? The formula is simple: whoever prevails wins.

Henry Ford once said, “He who believes that money is more important than work harnesses the cart before the horse.” This means that it is time for the Central Bank to start working or to make room for those who will work better. Let us repeat once again that the market is a universal tool; with its help you can not only provide for citizens, but also destroy the state. “Liberal sages” absolutize the market, just as sectarians absolutize their pocket god to control the “dark people.” However, it is not money and prices that make the market - people make the market. And it’s better not to forget about this. Thus, the lack of independence of the ruble, the lack of independence of the Central Bank and the lack of independence of the state is not a faceless market game, but a direct path to the economic and political bankruptcy of the state, which is clearly being pressured from the outside “in a market way.”

0

The ruble exchange rate is setting one anti-record after another, rapidly becoming cheaper in front of alarmed Russians. What happened to the national currency of Russia? What is pushing it down and why do the authorities look at it with indifference? Who benefits from the ruble collapse? Professor of Novosibirsk State University, Doctor of Economic Sciences Vladimir Klistorin answered these questions in an interview with Sibnet.ru.

- What is the fundamental reason for such a rapid collapse of the ruble?

The first thing you need to know is that the position of the national currency depends on the state of the state’s economy. There is an economic recession in Russia now, so, firstly, the ruble is unstable, and secondly, it is losing ground relative to major world currencies.

In general, the world is now experiencing economic growth of approximately 2.5-3%. In a number of countries there is a reverse trend: these are, first of all, Ukraine, Venezuela and Russia. In these countries, the national currency is falling.

- How exactly is the ruble exchange rate formed?

The ruble exchange rate is determined based on the results of daily trading on the Moscow Exchange. Based on the weighted average rate for a certain period of time during trading (usually the first half of the day), the Central Bank of Russia approves the official rate.

Previously, the Central Bank intervened in trading and tried to maintain the ruble exchange rate. Depending on whether the national currency was strengthening or weakening, he carried out interventions. If the ruble fell, he began to buy rubles, throwing the currency onto the market. Sometimes the financial regulator acted in the opposite manner. So he brought supply and demand to equilibrium.

But now the Central Bank has abandoned this policy. And therefore the market has become more volatile (changeable, unstable) and is now so susceptible to speculation by exchange players.

- What factors determine the exchange rate of the national currency, what makes the ruble fall and then rise again?

In reality, the exchange rate of the Russian national currency is determined by the expectations of exchange players. In other words, how do they imagine the exchange rate after a certain period of time, how do they predict the dynamics of the exchange rate.

Players on the exchange can be divided into two categories. The first is those who buy currency for real needs - economic transactions, transactions. The second is speculators who play on exchange rate differences, playing what is called short. In my opinion, now it is speculators who have the greatest influence on the ruble exchange rate. Now the speculative movement of the exchange rate dominates.

- Why then do they talk about the dependence of the ruble on the price of oil?

This is also related to the stock market game. For example, there is an expectation that oil will fall in price, which means that in the future the influx of foreign currency into the country will decrease. The supply of currency on the market will decrease, that is, fewer dollars and euros will enter the stock exchange. Thus, according to expectations and the market mechanism, the currency will rise in value and the ruble will fall. After all, Russia is very dependent on foreign currency earnings, received specifically from the sale of oil.

The currency exchange feeds on rumors. Recently there was information that Saudi Arabia, Russia, Qatar and Venezuela agreed to freeze oil production at a certain level. Oil immediately jumped in price, followed by the strengthening of the ruble. And just a few hours later the reverse outflow began. The players' expectations turned out to be too optimistic.

When there are problems with the general state of the economy, the market is always in a nervous situation. Then the money circulating on the stock exchange is not of those who need it to carry out export-import, credit or investment operations, but the funds of speculators playing short positions. Every rumor can cause exchange rate fluctuations. This attracts not investors, but speculators.

- Who benefits from the low ruble exchange rate?

In short, the low ruble exchange rate is beneficial for exporters, those who sell abroad, and disadvantageous for importers who buy something abroad. But it's not that simple. Oil producing companies, for example, also need a counter flow of imported goods. Many of them use sophisticated Western technologies or enter into contracts with foreign specialists to perform some work.

The low exchange rate of the national currency is also beneficial to the state. It has obligations in national currency. In Russia, our budget is drawn up and executed in rubles. If the national currency weakens, this depreciates the state’s obligations.

A weakening exchange rate is always accompanied by an acceleration of inflation. And from this, of course, the population suffers the most. The fall of the ruble is also very unprofitable for investors, since it is difficult for them to calculate their risks in such conditions. And many of them are slowing down investment projects or completely refusing to invest in Russia - this has a very bad effect on the economy.

- Can the ruble become a strong and prestigious currency?

The ruble is a completely normal currency. I repeat, its stability and strength depends on the state of the Russian economy as a whole. The ruble was a very stable currency when everything was going well in our economy in the mid-2000s. Back then it was simply an excellent currency.

And this, by the way, ensured a powerful influx of capital into the Russian economy. You simply convert dollars into rubles and place them on a deposit at 8% per annum, and then convert them back and receive 8% in foreign currency. This was simply impossible to do in other countries.

- What are the prospects for the ruble?

For now we can only talk about the near future - 2016. Unfortunately, official data show that the decline in the real sector of the economy continues in Russia and the volume of investment is declining. This means that it is better not to even think about strengthening the ruble for now. The general trend will be a slow depreciation of the ruble against the world's major currencies. This decline will be followed by short periods of recovery before tax payments, when large businesses will convert currency into rubles in order to pay taxes.

It is still difficult to say when the Russian economy will begin to grow (and this will inevitably happen). The first sign of recovery will be an increase in investment volumes, after which the ruble exchange rate and real incomes of Russians will begin to rise.

In order to develop the economy, it is necessary to have a stable national monetary unit

The strengthened ruble has a negative impact on the increase in exports of agricultural products, Russian Minister of Agriculture Alexander Tkachev said at an extended meeting of the United Russia faction, TASS reports.

“This (increase in exports of agricultural products - RNL) was due, among other things, to sanctions, devaluation of the ruble, and the weakened exchange rate of the ruble, which, unfortunately, does not make us happy today. When we see the (dollar - RNL) exchange rate of 58-57 rubles, this complicates competition and entry into export markets,” Tkachev noted.

Over the past three years, Russia has increased agricultural exports from $5 billion to $17 billion, the minister emphasized.

However, Tkachev considers the veterinary situation in the country to be the main enemy of the development of agricultural exports. According to him, the regions are not coping with the situation, so the Ministry of Agriculture is now developing legislation to tighten veterinary control.

“We have received the entire range of diseases, and for us this is fundamentally important, this is a strategic direction today. If we don’t put things in order in veterinary supervision, then... We will have fevers, viruses and diseases. This means that no one will need our products,” the minister explained.

In turn, the Chairman of the Supreme Council of United Russia, Boris Gryzlov, considers the strengthening of the Russian national currency a reason for congratulations, not regret. This is how he commented on the statement on this topic by the Minister of Agriculture of the Russian Federation, Alexander Tkachev, which was made on Tuesday at an extended retreat of the United Russia faction in the State Duma. The discussion was devoted to the development of agriculture in the Russian Federation.

“There was an interesting phrase from Alexander Tkachev, which I can’t help but comment on: “the ruble, unfortunately, has strengthened,” Gryzlov quoted the head of the department. “Well, probably, if we believe that our production has become export-oriented in all its directions, we can say so,” he agreed.

“But for the people, a strengthened ruble is, of course, an important asset, and we should be congratulated on this,” the politician emphasized.

“I am confident that the joint efforts of the state, party and citizens of our country will ensure food sovereignty,” Gryzlov concluded.

In addition, Boris Gryzlov called for the introduction of a mechanism to support priority investment projects in the agro-industrial complex (AIC) in order to further develop agriculture.

“It is necessary to create and implement mechanisms to support priority investment projects in the agro-industrial complex, as well as provide subsidies on preferential terms for investment and short-term loans,” he said.

Gryzlov is confident that agriculture as a whole has ceased to be considered a “black hole”, but has become a profitable, rapidly growing industry. “So, in 2016, a record harvest in post-Soviet history was obtained - 118 million tons of grain,” he noted.

In addition, Gryzlov emphasized that the sustainable socio-economic development of the country “is intended to be supported by many party projects,” such as “Russian Village.”

The statements of politicians were commented on in an interview with Russian People's Line by Doctor of Economics, Professor, Chairman of the Russian Economic Society. S.F. Sharapova:

Neither one nor the other is right, because neither one nor the other understands what an economic model should be that would ensure the economic security of the country, its national sovereignty, provide maximum social guarantees to people and maximum satisfaction of all vital needs. Unfortunately, these politicians have a very fragmented understanding of the economy, and each sandpiper looks at the world from its own hummock, from its own swamp. Unfortunately, we do not have people in the upper echelon of power who would really look at the economy from the perspective of national, and not some regional, departmental and narrow group interests.

In this case, I would like to say that the issue of the exchange rate is indeed a key issue today in the conditions of financial globalization, in conditions when all countries, including Russia, have become deeply involved in the world economy and various commodity and financial markets. This is becoming the main problem of all these countries today. In fact, in order to develop the economy, it is necessary to have a stable ruble, a stable national monetary unit. If there is no stable national monetary unit in the economy, then no economic development is, by and large, possible. Some individual fragmentary successes are possible, but in general such an economy is not able to ensure proportional, harmonious, coordinated development of all its parts. Therefore, everyone will pull the blanket over themselves. Gryzlov in one direction, Tkachev in his own direction.

Unfortunately, this is a clear manifestation of the fact that we do not have people who really think big from the perspective of national and state interests. To say that a decrease or increase in the exchange rate is good is a kind of madness. In 1944, when forty-four delegations met at the Bretton Woods Conference and discussed what the post-war world should look like, particularly regarding finance, there was no doubt that a fixed exchange rate was needed to lift broken countries up. This is an axiom.

Today everyone’s brains have become so messed up that some say they need to raise them, others say they need to lower them. No, it’s like in medicine - if a person’s blood pressure fluctuates, then not only will he not be able to perform any labor functions or be active, he will simply lie down. Therefore, doctors will tell you, and not only doctors, but also patients, that it is better to have stable low pressure or stable high pressure, but when fluctuations begin, this is the worst. But we do not have such mechanisms that would allow us to get rid of the so-called volatility of the ruble. The same can be said about the volatility of the euro, the American dollar, and so on, about fixed exchange rates.

When Tkachev says that we benefit from a lower ruble exchange rate, he actually admits that we will continue to develop as a country that is focused on foreign markets, which depend on the conditions of foreign markets. In addition, this is a country that does not return foreign exchange earnings at the rate of export of raw materials. This is a model of a commodity economy, and, of course, I cannot in any way support the position of our Minister of Agriculture.

After all, you need to understand that an undervalued currency exchange rate actually means subsidizing exports. This is understandable even to a literate student. What about subsidizing exports? Here I ask a question to my students. And due to the fact that there is a redistribution of the social product at the expense of those sectors of the economy that do not participate in this foreign trade exchange.

Organizations banned on the territory of the Russian Federation: “Islamic State” (“ISIS”); Jabhat al-Nusra (Victory Front);

Al-Qaeda (The Base); "Muslim Brotherhood" ("Al-Ikhwan al-Muslimun"); "Taliban movement";

“Holy War” (“Al-Jihad” or “Egyptian Islamic Jihad”); "Islamic Group" ("Al-Gamaa al-Islamiya");

"Asbat al-Ansar"; "Islamic Liberation Party" ("Hizbut-Tahrir al-Islami"); “Emirate Caucasus” (“Caucasian Emirate”);

"Congress of the Peoples of Ichkeria and Dagestan"; "Islamic Party of Turkestan" (formerly "Islamic Movement of Uzbekistan");

"Majlis of the Crimean Tatar people"; International religious association "Tablighi Jamaat";

At the same time, the country’s authorities are not at all eager to set this fair price. With one hand we, of course, raised the key rate, which affects the credit price of the ruble (the higher the rate, the more expensive it is to borrow rubles, and therefore the more expensive the rubles themselves), but with the other we direct “extra profits” from the sale of natural resources to purchase the so-called hard currency, thereby increasing its value relative to the ruble.

Simple theory

One of the axioms of a market multicurrency economy is that a weak national currency is beneficial to countries with a positive foreign trade balance. In human terms, if you sell a lot and buy little, it makes sense for you to lower your currency relative to the seller's currency. Because you incur expenses in your own monetary units, which are cheap, and you receive profits in other people’s, which are more expensive.

That is why the United States, the largest buyer on the planet, has been threatening China with sanctions since the beginning of the 2000s for trying to artificially depreciate the yuan. It’s already difficult for Americans to fight the dominance of Chinese goods, and if they become even cheaper (after all, wages in Chinese factories are paid in yuan), many sectors of American industry will become uncompetitive.

A strong, overvalued national currency is beneficial to the buyer country, but only if it does not intend to develop its own production. Among the leaders in overvaluation now are the Czech crown, South Korean won, Thai baht, dollar and Swiss franc. With an expensive currency, you can easily purchase other people’s goods, but at the same time you have high costs for salaries and taxes.

Read also:

Trump's policies

Donald Trump, the first true and uncompromising American patriot in the White House since Ronald Reagan, is trying to navigate between the Scylla and Charybdis of exchange rates in a rather cunning way.

On the one hand, it strengthens the dollar through increasing the key rate of the Federal Reserve System (it is formally independent, in fact controlled by several banking clans, but still cannot ignore the strategy of government authorities). He won the election with a rate of 0.25%-0.5%, and less than two years later the rate is 2-2.25%. The previous time the Fed set such high rates (beyond 5%) was in 2006, trying to gently “deflate the bubble” in the real estate market, but the bubble nevertheless burst, splashing its contents all over the planet.

On the other hand, trying to avoid the negative consequences of a strengthening dollar for the American economy, Trump is withdrawing from free trade agreements, that is, duty-free trade, and introducing duties - quite moderate, by the way - on a wide range of goods.

Donald Trump, the first true and uncompromising US patriot in the White House since Ronald Reagan. Photo: www.globallookpress.com

As a result, the United States can buy critically needed goods at low effective prices thanks to a strong dollar, but at the same time makes it difficult to import what is already produced in the United States through a system of tariffs. It’s also a sin for US residents to complain - with American incomes they can travel around the world and feel like kings (although outbound tourism is not particularly popular in the States). Simple and effective, especially if you do not pay attention to the political costs and complications of relations with old partners.

Logic of Russia

How is Russia behaving? It is in a different position - the import of a significant part of goods that compete with domestic ones is actually prohibited in our country not by the duty system (here we comply with the WTO rules that are beneficial to us), but through a food embargo. And a low ruble helps to compete in other areas - say, textiles or engineering. Thanks to him, Russia is rapidly conquering the world wheat market, selling it at prices significantly lower than those that Americans or Canadians can afford.

Another question is that there are a number of industries where the share of Russian goods is negligible and will not grow in the foreseeable future. This is, for example, a significant part of fruits and vegetables (the role of climate), almost all electronics, high-quality cars, a significant part of medicines, medium- and long-haul aircraft. The low ruble makes them significantly more expensive. The same applies to any foreign spending by Russians. But foreign tourists are delighted - remember how easily the representatives of impoverished Latin American countries spent rubles at the World Cup!

But the main beneficiaries of the ruble's weakness are, of course, exporters of raw materials. Not only oil and gas, but also coal, timber, water, precious stones and metals. They pay their salaries in rubles, bear a significant part of other costs in rubles, and the cheaper the ruble, the greater the income of these companies. It is difficult to doubt that it was the lobbyists of the raw materials sector who insisted on solving the problem of preserving excess income through the purchase of foreign currency, that is, depreciation of the ruble.

Photo: Sergej Cash / Shutterstock.com

There is one more nuance. The further the value of a currency is from its actual purchasing power, the easier it is to manipulate its price and thereby make a profit. Not a single decision of the Central Bank - be it a change in the key rate or an increase in the volume of foreign currency purchases - is made without prior discussion. And citizens who know the course of this discussion can receive incredible income through literally three or four purchase and sale transactions on the foreign exchange markets.

The longer the undervaluation of the ruble continues, the more such opportunities will be available to insiders of the Central Bank and the Ministry of Finance. And this is, of course, a minus of the current state of the national currency.

For a country with a self-sufficient economy that produces everything it needs for itself and also manages to export (this is called “autarky”), the low exchange rate of the national currency is certainly to its advantage. But even China, which is forced to buy energy, metals, and food products, is not like that, let alone Russia. Of course, if manipulation of the exchange rate led not to super-profits for individual companies and individuals, but to the saturation of the economy with money, to an increase in wages and pensions, one could only welcome the presence of the ruble among the top three undervalued currencies. But now this does not correspond to the interests of ordinary Russians, who are deprived of cheap holidays abroad (our climate is conducive to beach holidays for no more than 4 months a year, and Crimea and Sochi are not rubber), and affordable medicines, and partly access to advanced technologies.

It’s probably not worth pushing the exchange rate to 55 rubles per dollar, but 60 is significantly better for the people than what is happening now.

The government is again speculating on currency purchases

For the first time since the beginning of the year, the Ministry of Finance will reduce the amount of costs for purchasing foreign currency. If in the previous month Anton Siluanov’s department spent a record amount of 380 billion rubles for these purposes in the history of interventions, now the ministry intends to transfer just over 347 billion for the purchase of dollars, euros and pounds sterling. The reasons for the drop in expenses are a decrease in revenues from energy exports . In June, oil and gas revenues fell by 40 billion rubles. However, according to experts, firstly, Russia itself is to blame for the decrease in export excess profits, since it agreed to a deal to increase oil production. Secondly, having accumulated $500 billion as a reserve, our country no longer needs to replenish the “oil tank”, since it has not yet figured out what to spend these funds on.

The Ministry of Finance began buying foreign currency on the domestic market in February 2017. These transactions occurred for two reasons. On the one hand, such transactions were carried out within the framework of the budget rule. Currency was purchased in the following proportions: 45% US dollars, 45% euros and 10% pounds sterling. They were purchased with additional revenues from oil exports compared to the budgeted ones (in 2018 - above the base price of $40.8 per barrel). On the other hand, the money was used to replenish the National Welfare Fund (NWF). This trend was aimed at stabilizing the ruble exchange rate and reducing the dependence of the Russian economy on hydrocarbons.

Since March of this year, the Ministry of Finance has been steadily increasing the purchase of foreign currency on the domestic free market. In March, 192 billion rubles were allocated for these purposes, in April - 240.7 billion rubles, in May - more than 322 billion rubles, and in June - approximately 347 billion rubles.

Until recently, from June 7 to July 5, the Ministry of Finance planned to purchase foreign currency in the amount of 380 billion rubles. The ministry planned to purchase foreign currency worth 19 billion rubles daily. Next, the department intended to set new records, but for the entire history of interventions, but the opposite happened.

In July - early August, the Ministry of Finance will allocate only 348 billion rubles for the purchase of foreign currency on the domestic market. This happens for a reason. In July, the Ministry of Finance expects to receive 387 billion rubles in excess oil revenues, while at the end of June, actual oil and gas revenues were lower than forecast by 39.6 billion rubles.

Thus, in July, purchases will decrease by a total of 8%, and daily interventions by 17%. True, as he believes Director of the Analytical Department of Alpari Alexander Razuvaev By changing the policy of acquisitions in the foreign exchange market, the state is trying to distance itself from external and internal problems.

“This is not the year 2000. There is no need to accumulate foreign currency in order to pay off external debts and replenish reserves. Russia's international reserves are approaching $500 billion. This is a third of our GDP. In 2018, the oil cut-off price logically looks at $50 (now the cost of a barrel is approaching $77),” the expert notes.

Additional income that could be generated in excess of this amount can be spent on one-time payments to pensioners and other socially disadvantaged Russians. This would reduce poverty and support domestic demand. “Since the beginning of the year, the budget surplus is almost 500 billion rubles. If this money is used for a one-time payment to socially disadvantaged citizens, it will amount to more than 10 thousand rubles for each pensioner,” the expert believes.

“Russian monetary authorities are undervaluing the ruble. If there were no purchases by the Ministry of Finance, the dollar exchange rate would be 50 rubles per dollar. The undervalued exchange rate of the Russian national currency leads to an increase in inflation expectations, which naturally fuels price growth and does not allow the Central Bank to reduce the key rate to a level comfortable for the real sector. We will not be surprised if by the end of the year inflation exceeds 4%, which is predicted by the Bank of Russia. The Ministry of Finance believes that Russia needs a weak ruble. But Russia needs a strong national currency. A strong ruble means an influx of hot speculative money, an increase in quotes for Russian stocks and bonds. This is a powerful argument in favor of introducing a single Eurasian currency for the Russian Federation, Belarus and Kazakhstan. Only then will Russians earn significantly more in dollars. The undervalued ruble exchange rate is a decline in the standard of living of Russians, initiated by the efforts of their own government. Thus, high-quality imported goods and trips abroad become less accessible,” the expert notes.