The exchange rate of Russian currency on the Moscow Stock Exchange on July 5 for the first time since March 2022 fell to 91 rubles per dollar, for one euro they already give almost 100 rubles. Bloomberg connect it is with the consequences of the rebellion of the founder of Wagner PMC Yevgeny Prigozhin against the background of the deterioration of the financial situation in general.
Since the start of 2023, the ruble has fallen 18% against the dollar, one of the worst performances in emerging markets, the agency notes.
“Perhaps this (the Prigozhin rebellion) was the trigger for the weakening of the ruble, combined with the growth of imports, the weakness of exports, the demand for foreign currency for payments to non-residents and to extremely low liquidity,” said the chief economist of the investment banking division. of the BCS group of companies BCS Global Markets Natalya Lavrova.
At the same time, the Russians continue to withdraw money from the country. According to Bloomberg Economics, from the start of 2022 to May 2023, the volume of deposits abroad by individuals increased by $43.5 billion, to $73.1 billion in foreign currencies and banks from both the population and businesses. .
“The ruble has lost the support it received last year due to high energy prices and a double-digit interest rate,” said Alexander Isakov, Russian economist at Bloomberg Economics. According to him, an accommodative monetary policy offers little incentive to save in the national currency, and the Prigozhin rebellion “probably forced local investors to update their assessments of local risks”.
The Russian budget will benefit from a weaker ruble by boosting government revenue, but a depreciation of the national currency could fuel inflation and increase the possibility that the Central Bank could raise interest rates again, writes Bloomberg.
In mid-June, after the exchange rate fell to 85 rubles. per dollar Deputy Prime Minister Andrey Belousov declaredthat the national currency is “in a more or less comfortable optimal zone for the economy”, denoting it in the range of 80-90 rubles. per dollar. He attributed the weakening of the ruble to the adjustment of the exchange rate.
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