In the third quarter and following the results of nine months, slow growth continued in Russia. A number of problems, especially regarding the standard of living of the population, still remain, however, some positive progress is being made in this area. The threat of a new collapse in oil prices or devaluation of the ruble is now unlikely, despite the fact that oil and financial markets remain highly volatile throughout the world, a strengthening of the US dollar by the end of the year is very likely.

What are the results of economic development in January-September? current year? Does Russia have enough safety margin in case the dollar rises?

GDP: growth picking up?

For the second quarter of 2017 Russia's GDP grew by 2.5% compared to similar period 2016. This is significant progress, as in the first quarter gross domestic product grew year-on-year by only 0.5%. And according to the results of the first half of the year, GDP increased by 1.6% year on year. The indicator slightly diverged from expectations, since the consensus forecast of analysts (including us) was expecting growth of 1.7%. However, stormy GDP growth in the second quarter contributes to an upward revision of official forecasts for the growth of this indicator in 2017. The Ministry of Economic Development raised its forecast for GDP growth for the year from 1.5% to 2%, and our forecast for GDP growth in 2017 did not change - we expect growth of 2%.

Inflation: record decline

Based on the results of nine months of 2017, annual inflation consumer prices in Russia decreased to 4.1% (at the beginning of the year it was 4.6%). Thus, the inflation target of 4% planned in the state budget for the current year will most likely be met. Our forecast for annual inflation coincides with the official one. Let us note that in August and September of this year, deflation was recorded in Russia, while negative food inflation was recorded even from June to September (see Chart 1). In October, the Ministry of Economic Development expects inflation to fall below 3%. Our forecast for annual inflation for 2017 of 4% almost coincides with the forecasts of government departments. The reduction in inflation is primarily facilitated by the moderately tight monetary policy of the Central Bank of the Russian Federation, as well as a fairly stable ruble exchange rate this year (see Chart 2).

Chart 1. Dynamics of consumer price inflation in the Russian Federation, January-September 2017, %

Source: Rosstat

Industry: oil is not the growth leader

Over the eight months of 2017, industrial production in the Russian Federation increased by 1.9% year on year. This is a success when compared with the growth dynamics for the first quarter of only 0.1% year-on-year, but the success is quite modest relative to the dynamics of the second quarter, when the industry grew by 3.7% year-on-year (with the largest growth occurring in April- May). At the same time, the main drivers of production growth in Russia are non-resource sectors - most mechanical engineering sectors, a number of chemical industries, and the growing light industry. It is especially important to note that following the results of eight months of 2017, the production of computers and spare parts for them increased by 64% in Russia. From the point of view of the quality of economic growth, this is a great achievement in terms of the development of high-tech industries, but, on the other hand, sales of Russian-made computers for eight months amounted to only $317 million, which is comparable to the revenue of a medium-sized corporation. Oil production, which grew by only 0.8% year-on-year over the eight months of 2017, is not currently a growth driver, but natural gas production, which grew by 14% year-on-year over the eight months, makes a fairly significant contribution to production growth. Our growth forecast industrial production in Russia in 2017 did not change and amounted to 2.2-3%.

Personal incomes: a difficult way out of the recession

Over the eight months of 2017, real disposable cash income of the Russian population decreased by 1.2% year on year, which is some progress compared to the results of the first half of the year, when this indicator showed a decrease of 1.3% compared to the same period in 2016. Bye real income and, accordingly, indicators of the standard of living of the population remain the most vulnerable point Russian economy. However, in August, the decrease in consumer price inflation had a positive effect on real incomes, and therefore in August the decrease in this indicator was only 0.3% year on year. At the end of eight months of 2017, the nominal value increased by 7.2% year on year. wage employees of enterprises and organizations, which is higher than the annual inflation rate, on the one hand, but on the other hand, not all employees of enterprises and organizations have felt this increase. But real wages over the eight months of this year increased by 3.7% year on year. If inflation continues to decline, then, probably, by the end of 2017 the negative trend in the decline in real incomes will be reversed. However, this growth is still unsustainable.

Retail sales began to grow

In the second quarter of 2017, the decline in retail sales gave way to an increase of 1% year on year. However, at the end of the first half of the year, retail sales still decreased by 0.3% year on year, which was the result of a weak first quarter. And over the eight months of 2017, retail sales grew by 0.2% year on year. The slowdown in the decline in real income has a positive effect on the dynamics of retail sales. However, consumer demand and, along with it, retail sales will grow steadily only when real incomes of the population show growth.

Investments: growth intensifies

Investments in fixed assets Russian enterprises in the first half of 2017 increased by 4.8% compared to the same period in 2016, while in the second quarter of 2017, annualized investment growth amounted to 6.3%. Recall that investment growth is the main factor for future GDP growth. The volume of investment is growing the most in coal industry, electric power industry, telecommunications and IT sector, catering, hotel business.

Oil: reversal of the downward trend

Brent oil in the third quarter, it reversed the downward trend and rose in price by 14%, and at the end of nine months its decrease was only 0.6%. In the last week of September, the price of Brent crude oil renewed its annual highs since January, the price of Brent soared above $58 per barrel. This was facilitated by a series of destructive hurricanes that swept over the United States in September: natural disasters negatively affected the production of shale oil and, accordingly, caused a strong increase in oil prices at the end of the month. In addition, Russian Energy Minister Alexander Novak said in September that he does not exclude the possibility of extending the OPEC+ deal after the first quarter of 2018. We believe that the increase in oil prices, starting from the second ten days of September, was partly due to the statement Russian minister. We believe that oil prices may continue to rise in the fourth quarter.

Foreign exchange market: the ruble fell due to oil prices and Trump

In the third quarter and for nine months of this year, the ruble showed multidirectional dynamics in relation to different currencies. Thus, according to the results of the third quarter of this year, the ruble rose in price against the dollar by 2.9%, and, on the contrary, fell in price against the euro by 1.4%. And over the nine months of this year, the ruble rose by 3.8% against the dollar, and fell by 7.5% against the euro. The euro turned out to be more volatile than the dollar in the third quarter, which was noticeable in the pair EUR/RUB(see chart 3). The rise in the ruble/dollar exchange rate could be caused by various factors. Firstly, the depreciation of the dollar against the euro by 11.4% over the nine months of this year, secondly, the increase in oil prices in the third quarter, thirdly, the recovery from the crisis and the transition of the economy to a stage of moderate growth. It is important to note that for the export-oriented Russian economy, a slight weakening of the ruble in the first half of the year helped exporters increase production volumes, and in fact became a factor in the strengthening of the ruble against the dollar already in the third quarter.

Chart 2. Average exchange rates of the ruble to the dollar and the ruble to the euro by month, January-September 2017.

We believe that the dynamics of the ruble exchange rate and world reserve currencies By the end of 2017, the following events will affect:

Is the Fed heading to strengthen the dollar?

This is probably true. Let us remind you that in the fourth quarter there will be two meetings of the Committee on open markets Fed: from October 31 to November 1 and December 12-13. The most important meeting for the dollar and, ultimately, for the world will be the December meeting. Judging by the speeches of Fed representatives and Janet Yellen herself, the interest rate will be raised in December. This is fueled by record low unemployment in the US, which reached just 4.2% in September, a 16-year low. Although retail sales and inflation show weaker dynamics, this should not, in our opinion, prevent the Fed from raising rates. In December, the Fed may begin clearing its balance sheet, that is, selling excess assets in the form of US government bonds (the volume of assets accumulated on the Fed’s balance sheet has reached $4.5 trillion). This comes with a promotion interest rate in the USA will mean the Fed transition from soft to hard monetary policy and, accordingly, the rate of strengthening of the dollar. We assume that a sharp rise in the dollar exchange rate, however, will be avoided; in addition, in the United States there is no clarity on the parameters of future tax reform. Sluggish reform and lack of a clear economic policy the government of Donald Trump may become an obstacle to significant growth of the dollar. For now, we expect a moderate rise in the dollar starting in December.

The Bank of Russia will most likely continue to reduce the key rate

In the fourth quarter, the Board of Directors of the Bank of Russia will hold two meetings: on October 27 and December 15. The Central Bank of the Russian Federation did not rule out the possibility of continued decline key rate, currently 8.5%, in the fourth quarter of this year. We believe that at the meeting on October 26 the key rate will be reduced to 8%; the likelihood of a further rate reduction in December seems small. Low inflation is an important factor stimulating the Central Bank of the Russian Federation to further reduce rates, but the flip side of this process was a sharp decline in inflation in August and September. Thus, the Bank of Russia will need to find a reasonable balance between supporting production and stabilizing financial, including banking sector, which, with the exception of a small number of the largest banks, is still finding it difficult to operate in an environment of sharply declining rates, hence financial difficulties from a number of large banks.

Chart 3. Dynamics of the key interest rate in the Russian Federation since the beginning of 2017, %

The consequences of the referendum in Catalonia do not yet pose a threat to the euro

On October 1, a referendum on independence from Spain and the creation of a separate state was held in the Spanish autonomy of Catalonia. Despite the fact that almost 90% of voters who came to the polling stations voted for independence with a turnout of 43%, and the Parliament (Generalitat) of Catalonia approved the declaration of independence, for now the head of the autonomy is calling for postponing the declaration of independence and starting negotiations with Madrid through the mediation of the leadership of the European Union. On this news, the euro strengthened against the dollar. The further development of events raises many questions, but it seems that neither Madrid nor Barcelona are interested in abandoning dialogue. Neither side wants a civil war or new economic difficulties. However, until the parties come to an agreement on how Catalonia will continue to live within Spain and what additional rights it will receive, the likelihood of shocks and unpredictable developments in this country still remains. We believe that the euro in this context will be less attractive than the dollar in the fourth quarter.

The ECB may tighten monetary policy

In the fourth quarter there will be two meetings of the Board of Directors of the European central bank- October 26 and December 14. ECB head Mario Draghi said back in the summer that the ECB could return to the issue of changing the quantitative easing program before the end of the year. The European financial regulator is discussing raising interest rates, which are currently at zero. However, it is still difficult to name the timing of the change monetary policy in the eurozone. It is likely that the ECB will first wait for the Fed's decision to raise interest rates; in addition, the unpredictability of developments in Catalonia also forces financial regulator do not make sudden movements. An interest rate hike would lead to a significant rise in the euro, however, it seems that the ECB does not intend to rush into an increase just yet. The key argument is that accommodative monetary policy is working, judging by the eurozone's fairly strong macroeconomic performance.

OPEC meets again, but with whom?

The next OPEC ministerial meeting is scheduled for November 29 in Vienna. Will it have an impact on the oil market? Judging by the fact that oil has become cheaper since the beginning of the year, and was unable to maintain its annual high of $58 per barrel in September, the oil market is not paying much attention to the actions of the oil cartel. And primarily because the cartel itself does not comply with the discipline associated with the implementation of the OPEC+ agreement to reduce oil production. There is also pressure on the market from American shale oil producers. Recently, OPEC Secretary General Mohammed Barkindo said that US shale oil producers should be involved in the OPEC+ agreement. The market reacted to this statement with growth, but a more significant factor for the oil market, in our opinion, will be the participation in the agreement of Nigeria and Libya, which, although they are members of OPEC, refused to comply with it. If these two countries join the agreement, then oil will have an incentive to grow further.

Putin's election campaign could start at the end of the year

Let us remind you that in March 2018, presidential elections will be held in Russia. The current president, Vladimir Putin, has not yet announced his participation in future elections, although no one doubts that he will participate in the elections and, of course, will win. An official announcement by Vladimir Putin about his participation in the presidential campaign could take place, in our opinion, before the end of the year, possibly during the traditional December press conference for Russian and foreign media. In itself, Putin's announcement of his desire to run for president again will not have an impact on the foreign exchange market, but it may create optimism in the stock market. In addition, during the election campaign, Vladimir Putin may make a number of statements regarding his economic policy, and this may cause certain movements in the foreign exchange market, as a rule, in the direction of strengthening the ruble.

Anniversary of the October Revolution: is it significant for the market?

Let us remind you that on November 7, Russia celebrates the anniversary of a significant event - the 100th anniversary of the October Revolution of 1917. This event, to which different political forces in the country have different attitudes, will not have a direct impact on either the currency exchange rate or the stock market, since it has more historical and cultural significance for the country than economic. However, it cannot be said that it is not capable of having an indirect impact on the economy. In particular, in St. Petersburg, where this date will be widely celebrated, despite the fact that November 7 is no longer a day off, a large influx of foreign tourists is expected, primarily from China, a number of Latin American countries and those countries of the South -East Asia, which have successfully implemented the Chinese economic and political model (in particular, Vietnam and Laos). An influx of tourists is also expected in Moscow - there will be quite a lot of people wanting to visit places associated with the name of Lenin. This event may have an indirect impact on future economic results, as tourism will provide the country with additional demand for hotel services and will likely increase retail sales.

Forecast:

In the fourth quarter of 2017, in our opinion, the main risks for the ruble are the possible strengthening of the dollar, which could lead to a temporary decline in oil prices. There are also risks that the growth of GDP and industrial production in the second half of the year will slow down, since with a fairly stable ruble exchange rate, import substitution no longer works, and consumer demand has not yet fully recovered. However, we do not expect in the fourth quarter either a collapse of the ruble or a collapse in oil prices, similar to those that took place in 2014-2015. We expect that in the fourth quarter, if the cleanup of the Fed's balance sheet brings immediate results and the tax reform of US President Donald Trump is successfully launched, the dollar exchange rate may rise to levels of 60-62 rubles, but most likely it will not stay there for long , since Russia also has a margin of safety thanks to economic growth and low inflation. We expect that by the end of the year the dollar will trade in the range of 57-62 rubles, and the euro at levels of 66-70 rubles.

Natalya Milchakova, Deputy Director of the Analytical Department of Alpari

Expert forecasts: how much the dollar will cost in Russia

The unstable exchange rate of the national currency and the unstable economic situation do not allow long-term forecasts. For example, analysts cannot give a definite answer about how much the dollar will cost from October 1. However, most of them express an opinion about possible growth American currency V last month summer.

Dynamics official rate currencies, maximum values

According to the Moscow Exchange, in July the US dollar rose by 1.4%. It is noted that the growth of the American currency continues for the second month in a row, which means further ascent is not excluded.

Experts make their predictions why Russian ruble does not regain surrendered positions. Firstly, on economic situation in Russia, sanctions and Russian-American relations, investor sentiment and capital flows influence. How do they pass it on? last news, these factors will have a further impact on the Russian currency and it is possible that, at least until the end of summer, the ruble will continue to weaken. In the short term, expert forecasts come down to a level of 61-64 rubles per dollar. At the same time, economists believe that the European currency will also lose its position in relation to its American counterpart.

Analysts unanimously call sanctions the main enemy of the Russian ruble - it is because of them that the national currency cannot recover. And the forecast of 62-63 rubles per dollar is just the beginning and the national currency can significantly accelerate its decline if relations between Russia and the United States do not improve.

On the other hand, investors are now awaiting information on inflation for July in the United States. Plus, the reduction of the Central Bank's key rate in September will strengthen the exchange rate of the Russian ruble. Thus, the positive forecast of analysts comes down to 59-61 rubles per dollar. However, most experts are confident that U.S. $ will rise by several points during this month.

Constantly monitors US dollar to ruble exchange rate. Below is a report on changes in the US Dollar exchange rate during October 2017. You will find information such as US dollar value for every day in October 2017, minimum, maximum and average cost US dollar. US Dollar Price is the market weighted average (for fiat currencies the rate of the Central Bank of the Russian Federation is given).

Chart of changes in the US dollar to ruble exchange rate for October 2017

Below is US dollar to ruble exchange rate chart for every day for October 2017. average price US dollar calculated as a weighted average value of the US dollar on the market. For national currencies The graph shows the exchange rate of the Central Bank of the Russian Federation.

US dollar to ruble exchange rate table in October 2017

US dollar to ruble exchange rate table in October 2017 includes the US Dollar rate for each day and changes in the US Dollar rate. The change in currency value is calculated in absolute terms, that is change in the price of the US dollar in rubles, and in relative values, that is change in the value of the US dollar in percent.

Day months	Number of units	Well US dollar	Change of course US dollar
			RUB	%
October 3, 2017	1 USD	57.8134 RUB	–	–
October 5, 2017	1 USD	57.7832 RUB	−0.0302	−0.05%
October 6, 2017	1 USD	57.5811 RUB	−0.2021	−0.35%
October 7, 2017	1 USD	57.7612 RUB	+0.1801	+0.31%
October 10, 2017	1 USD	58.3151 RUB	+0.5539	+0.96%
October 11, 2017	1 USD	58.0713 RUB	−0.2438	−0.42%
October 12, 2017	1 USD	57.921 RUB	−0.1503	−0.26%
October 13, 2017	1 USD	57.6869 RUB	−0.2341	−0.4%
October 14, 2017	1 USD	57.6196 RUB	−0.0673	−0.12%
October 17, 2017	1 USD	57.0861 RUB	−0.5335	−0.93%
October 18, 2017	1 USD	57.3392 RUB	+0.2531	+0.44%
October 19, 2017	1 USD	57.2721 RUB	−0.0671	−0.12%
October 20, 2017	1 USD	57.5706 RUB	+0.2985	+0.52%
October 21, 2017	1 USD	57.5118 RUB	−0.0588	−0.1%
October 24, 2017	1 USD	57.4706 RUB	−0.0412	−0.07%
October 25, 2017	1 USD	57.5852 RUB	+0.1146	+0.2%
October 26, 2017	1 USD	57.614 RUB	+0.0288	+0.05%
October 27, 2017	1 USD	57.7643 RUB	+0.1503	+0.26%
October 28, 2017	1 USD	58.0833 RUB	+0.319	+0.55%
October 31, 2017	1 USD	57.8716 RUB	−0.2117	−0.36%

Minimum, maximum and average exchange rate of the US dollar to the ruble in October 2017

The table shows minimum, maximum and average exchange rate of the US dollar to the ruble in rubles in October 2017. For the minimum and maximum rates, the date on which this rate fell is indicated.

In October 2017 US dollar value in rubles varied in the range from 57.0861 RUB to 58.3151 RUB with an average value of 57.6861 RUB. At the same time, the minimum average daily price per US dollar was recorded on October 17 (57.0861 RUB), maximum value of the US Dollar in October 2017 dated October 10 and amounted to 58.3151 RUB. Hesitation US dollar exchange rate within a month 1.2290 RUB.

Fresh forecast of the dollar to ruble exchange rate for October 2017. What will happen to the USD/RUB pair in the near future? When will the dollar collapse, or is the currency still worth buying? Read expert opinions and the latest news.

You can view the dollar exchange rate of the Central Bank of the Russian Federation online .

Dollar exchange rate in October 2017. Key Factors

In September, the Russian ruble surprised everyone again. Despite the reduction of the Bank of Russia interest rate to 8.5% (September 15) and the US Federal Reserve meeting that was positive for the dollar (September 20), at the end of the month the Russian currency began to take off again.

The key supporting factors were taxable period, a positive resolution to the B&N Bank story, and, of course, rising oil prices. What will happen to the quotes of “black gold” in October and how will this affect the ruble exchange rate?

From a technical point of view, the price of oil has approached strong resistance around the $57 mark. Here are the highs for 2017. According to most analysts, from this level the price of oil will turn down.

On November 29, the next meeting of OPEC countries will take place in Vienna, where the extension of the agreement on freezing oil production will be discussed. However, Russian Energy Minister Alexander Novak already said in September that it was unlikely that a quick agreement would be possible: in his opinion, consensus would not be reached before January 2018.

Analysts at Goldman Sachs bank warn: protracted negotiations and increased uncertainty associated with the OPEC+ deal could lower the price of oil by $3-5 dollars from annual highs.

In addition to oil prices, in October the ruble will be guided by the policies of global central banks. In the long term, the divergence in monetary policy will increase: the Central Bank of the Russian Federation is in a cycle of lowering interest rates, and the Fed and the European Central Bank, on the contrary, are preparing to tighten policy.

Meetings of central banks will take place at the end of October, expectations on these issues and the latest news will be reflected in exchange rates.

Dollar exchange rate: forecast for October 2017

The USD/RUB pair remains in the medium-term range of 55.5 rubles. - 61 rub.

Analysts believe that short-term drawdowns of the dollar below 57 rubles per dollar are possible, but at these levels the currency will be actively purchased

Analysts do not expect a sharp rise in the pair in October 2017. The 60 mark will likely remain the main resistance level for the dollar.

As you know, when planning the budget for the next year, the value of the dollar is included in the same way as the ruble, but the fluctuation of the exchange rate throughout the year is absolutely not taken into account. The current year 2017 is no exception, and today we will give our assessment of the dollar exchange rate for October. We will answer main question where it will go, up or down - the latest news.

As of today, the dollar has exceeded 57 rubles. and rapidly rises to 58 rubles. With such growth, the budget could suffer losses of more than 250 billion rubles. Not only is this a huge amount for the state, but analysts also give disappointing forecasts.

Some analysts argue that the dollar exchange rate will be affected by an increase in oil prices in October 2017, and this will have a negative impact on the US economy and the dollar exchange rate forecast for October will be disappointing. Let us recall that it was the United States that in every possible way initiated a reduction in prices on the oil market. Also, new sanctions against the Russian Federation cannot be discounted, which will lead to a jump in currency pair dollar/ruble.

Although the rise in oil prices is not final and some analysts still predict a further decline in oil prices. This picture will also have a negative impact on the country’s economy because the majority of the Russian Federation’s profit comes from the sale of oil and there will be a noticeable fluctuation in the dollar exchange rate in October 2017 (dollar/ruble).
To stabilize the situation, the government decided to cooperate with Asian countries in the supply of petroleum products and natural gas. This should have a beneficial effect on the ruble exchange rate, although the introduction of new sanctions is not excluded.

Even in such a situation, Russia will be able to obtain certain benefits. Due to sanctions, domestic producers will be able to take a leading position in the market, because goods of European origin are prohibited in domestic market. This has a positive effect on agriculture and industry.

How much will the dollar cost in October 2017 - latest news

If we take all factors into account, analysts give a new forecast for the dollar exchange rate for October 2017:

At the beginning of October the exchange rate was 57 rubles/dollar
The maximum dollar can grow to 58.5 rubles/dollar.

In other matters, analysts predict that the ruble will strengthen and the exchange rate should stabilize and average 57.5 rubles, but at the end of the month the mark may rise to 58 rubles. Although this is only a preliminary forecast and we need to monitor the price of oil on the world market. Which have a change in the domestic currency market.