Is the Rouble stabilizing?

Kindly translated by Anne-Marie de Grazia

We know that the Rouble was subjected to a wave of speculation which brought about its fast decrease since end of September and early October. However, it appears that over the past week it may have stabilized and that we are returning to values more in keeping with those implied by a drop in the price of the barrel of crude (between 110 USD and 80 USD).

Chart 1

Exchange rate of the Rouble (reversed scale)

 A - Tx de Chng

For all the currencies considered, we notice a recent tendency to a hike in the exchange rate of the Rouble. This tendency is even more noticeable if one makes do with the evolution of the exchange rates since September 30, 2014.

Chart 2

Exchange rate of the Rouble (on a base of 100 since January 1st)

 A - Tx de ChangeSEP

It is still too early to say if this tendency is short-term, or if it corresponds to measures taken by the government and the Central Bank against speculators and speculation. But we may consider that we are witnessing the end of this episode of speculation and that the Rouble will revert to values more in keeping with the economic reality, i.e. 40 RR for 1 USD (it is at present at over 45 RR). This rate corresponds to a balanced budget at a price of 80 USD a barrel, which seems to be the new level of equilibrium for the price of oil. Indeed, at this price, the budget of the government is balanced. Speculation had provoked an unhinging of 17.5% in relation to the equilibrium level at 40 RR. This bears witness to the extent of the speculation to which the Rouble was subjected. The movement of foreign currency loans has picked up again after a period of rarefaction of foreign currencies on the exchange market.

Normally, the Rouble should therefore tend towards its new equilibrium rate in the coming weeks. It should stabilize around 38-42 RR for 1 USD, which should contribute to stabilize inflation.

 


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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