Experts argued about its impact on the ruble: the delay in foreign trade payments due to sanctions became more significant for the exchange rate
For the extension of the presidential decree on the mandatory sale of foreign currency earnings by exporting companies The Ministry of Finance of the Russian Federation spoke out at the end of January. At the same time, the Bank of Russia has repeatedly opposed the extension of this document, pointing out that a strong balance of payments and a high key rate played a major role in the strengthening of the ruble in the fourth quarter of 2023. The presidential decree will end on April 30, but there is no signal from the authorities about what decision will be made. What the “powers of this world” are up to, why they are silent and how this could affect the ruble, MK found out from experts.
Let us recall that the decree on the sale of foreign currency earnings by exporters until April 30, 2024 was signed by Russian President Vladimir Putin on October 11 last year. After this, the dollar exchange rate, which had previously reached 101 rubles on the Moscow Exchange several times, began to decline and at the end of the year stabilized in the range of 90-91.5 rubles per dollar. However, the Bank of Russia claims that the decisive role in the depreciation of the national currency was played not by the sale of foreign exchange earnings, but by the strengthening of the trade balance and the effect of the regulator’s strict monetary policy, that is, maintaining a high key rate.
But the Ministry of Finance, on the contrary, attributes the success achieved by the ruble to the decree signed by the president, and at the end of January they supported the extension of the mechanism for the mandatory sale of foreign currency earnings, “which has shown its effectiveness.” At the same time, Anton Siluanov’s department allowed an adjustment to the revenue return scheme “if exporters encounter difficulties in returning it.”
Experts argue about which side is right. “Now the Central Bank is coping with the stability of the ruble exchange rate, — says an expert on financial markets at Alfa Capital Management Company Nikolai Solabuto. — There is no increased demand for foreign currency from the population. They probably decided to see how the exchange rate would behave after the mandatory sale of currency was abolished. Now everything converges on the fact that the exchange rate will remain stable in the coming months. It has its own cycles, and until August the ruble was growing, so the government and the Central Bank are not afraid for the exchange rate of the national currency.”
The Central Bank of the Russian Federation is confident that the effect of the decree on the ruble exchange rate does not justify the negative effect on exporters, who face increased conversion costs and new difficulties with cross-border payments. “We agree with the regulator on this issue, which is confirmed by data on the balance of payments: foreign assets in March increased by $15.5 billion against an increase of $4.2 billion in February. That is, export volumes are growing, but real payments do not reach Russia due to payment problems due to sanctions, — The “Digital Broker” analyst continues the topic. Natalia Pyryeva. — Accordingly, the mandatory sale of foreign currency earnings further complicates the life of exporters.”
Another part of analysts reminds that the law of supply and demand is valid for the foreign exchange market. All decisions that promote the inflow of foreign currency into it or reduce the outflow are beneficial for the ruble. “Of course, when exporters were obliged to sell a large part of their proceeds on the domestic market, this could not but affect the exchange rate, — Fontvielle Investment Advisor Maxim Fedorov enters into the dispute. — If we assess the consequences of the cancellation of the presidential decree, then I would proceed from how this decision affected the market in October-November. The effect was as follows: in less than a month, the ruble strengthened against the US dollar by 8.4%, against the euro — by 7.6% to the yuan — by 8.3%. Of course, it must be taken into account that at that moment the markets also felt the first effect of the key rate increase, since about 3 months had passed since the first rise, and this is the minimum period for it to begin to influence various economic spheres. However, I still attribute this local rally mainly to the decree.” Thus, the cancellation of the presidential decree, all other things being equal, can weaken the ruble by 7-8% against key currencies, the expert concludes.
Associate Professor, Department of Finance for Sustainable Development, Russian Economic University. Plekhanov Mikhail Gordienko, for his part, believes that the decision on the fate of the decree will be adhered to by the government, like other key steps, to the last, so that unfriendly countries do not have the opportunity to familiarize themselves with their announcement and counteract them.
“We believe that the government has not yet made a final decision, so there is no clear information about the future of the decree yet, — The chief analyst of Sovcombank expresses his opinion Mikhail Vasiliev. — Last week, Finance Minister Anton Siluanov said that the government has made proposals to extend this measure until the end of 2024, but no decision has been made yet.” Let us remind you that now exporters must deposit at least 80% of the received currency into accounts with Russian banks and sell at least 90% of the credited proceeds. “We believe that the measure will be extended after April 30, but the sale parameters (80% and 90%, or sale deadlines) may be relaxed, and exporters will sell smaller volumes of currency than now,” — explained the analyst.
According to the stock market expert “BCS World of Investments” Mikhail Zeltser, currency barriers in terms of standards for the repatriation of exporters' earnings will generally remain in place after April. True, some relaxations are possible for individual companies engaged in foreign economic activity. He has no doubt about the high effectiveness of these standards for restoring the ruble exchange rate. It is enough to evaluate the dynamics of the ruble after the autumn decree, and the questions will disappear: in a matter of months, the ruble strengthened from almost 102 rubles to below 88 rubles per dollar.
According to the head of the department for analysis of banks and the money market of Veles Capital Investment Company Yuri Kravchenko, if the decree on the mandatory sale of foreign currency earnings is not extended from May, then the dollar, euro and yuan, although not immediately, may try to gradually update the April stock exchange highs. Now it is, respectively, 94.54 rubles, 101.4 rubles and 13 rubles.