Experts predicted several disastrous months for «wooden»
The sharp rise in oil prices, caused by the decision of OPEC + members to reduce production, did not become a reason for the strengthening of the Russian currency. On the contrary, the ruble exchange rate rolled back to the level of April 2022. However, this looks like a paradox only at first glance. The fact is that the reduction in production led to an increase in the cost of the international grade Brent, but the prices for the domestic brand Urals, on which the “wooden” brand depends, are still at a minimum. However, in order to reduce the catastrophic budget deficit, our government now needs a weak rather than a strong ruble, so the authorities are unlikely to fight for its support.
Oil quotes after the decision taken the day before by OPEC + to reduce the production of raw materials rose: a barrel of Brent is trading above $87. But this is a Mediterranean variety, and the average cost of a Russian “barrel” of Urals, according to the Ministry of Finance, at the end of March is $47.85, which is $1.7 lower than in February, and almost 2 times less than it was in March 2022 . Against the background of such dynamics, the dollar exchange rate for the first time since last year's April exceeded 79 rubles, and the euro went off scale for 86 rubles.
According to financial analyst and private investor Fyodor Sidorov, to support the ruble, it is necessary to increase prices for Urals, which continues to serve as the main export brand of “black gold” from our country. Although the Urals discount to Brent has slightly decreased, the discount continues to be quite impressive. Secondly, in connection with the introduction by European states of an embargo on the purchase of Russian raw materials, the supply of domestic mining companies to the continent's market, according to Bloomberg, fell by 54%. “Due to the sanctions, our oil has become “toxic” for many buyers, so the number of customers has decreased: instead of dozens of EU countries, in fact, only China, India and Turkey remained,” the analyst says. “Of course, exports to our new energy partners are increasing, but even increased shipments in these directions are not yet able to fully replace past sales to European customers.”
Ways to deal with the discount provided to Asian consumers have already been found. On April 1, a new rule came into force in Russia, providing for a gradual directive reduction of the discount: in April, the gap between Brent and Urals should not exceed $34, in May — $31, and from July — $25 per barrel. Thus, the cost of the Russian export «barrel» should eventually reach the $70 budgeted bar.
According to Vladimir Chernov, an analyst at Freedom Finance Global, in this regard, an increase in treasury revenues can be expected in the coming months, which will be the key to the upcoming strengthening of the ruble. But the paradox is that a weaker national currency is now more profitable for the economy of our country, since in this case government revenues from the sale of export goods will grow. So far, the situation with filling the budget is deteriorating every month. If in January its deficit was fixed at 1.76 trillion rubles, in February it increased by another 800 billion, and in March, according to various sources, it amounted to 3.3 trillion to 4 trillion rubles. Against this background, the expert believes, the Russian government can carry out hidden or indirect interventions on the currency exchange in order to weaken the value of domestic banknotes.
However, such a policy of weakening the national currency, according to Oleg Zhuravlev, general director of WORMHOLES Implementation , will be justified, rather, in terms of solving momentary tasks to fill the budget. At the same time, there is a risk of a noticeable acceleration of inflation, on which the rate of the «wooden» has a significant impact. “The government will have to maneuver: on the one hand, it will have to deal with rising prices and a fall in the purchasing power of money; on the other hand, to cope with the avalanche-like acceleration of the size of the budget deficit,” the expert warns. In the coming months, we should expect the weakening of the ruble in the range of 80-85 rubles per dollar, but such dynamics will only slightly close financial holes in the treasury, the source of MK believes.