GENERICO.ruEconomicsA forecast for the ruble exchange rate for three years ahead has been made: “There is nowhere to go”

A forecast for the ruble exchange rate for three years ahead has been made: “There is nowhere to go”

Experts assessed the accuracy of the Ministry of Economic Development's currency forecast

By the end of 2024, the Russian currency will weaken to 98.1 rubles per dollar, the Ministry of Economic Development expects. The department, known for its optimistic assessments, this time presented a very harsh macro forecast, extending right up to 2027 inclusive. Was it worth looking so far ahead in conditions of total uncertainty and a mass of potential shocks that could materialize at any moment? “They have nowhere to go, this is their job,” one of the experts interviewed by MK reasonably noted.

Experts assessed the accuracy of the Ministry of Economic Development's currency forecast

Earlier at a government meeting, the head of the Ministry of Economic Development, Maxim Reshetnikov, explained the creeping devaluation of the ruble with the complex concept of “inflation differential”. According to him, the growth of consumer prices in Russia, which consistently exceeds American, European and Chinese indicators, does not allow us to count on the strengthening of the national currency in relation to the currencies of developed countries.

According to the ministry’s calculations, by the end of 2025 the ruble exchange rate will drop from the current level of 92 rubles to 99.1 per dollar, by the end of 2026 – to 103.0, by the end of 2027 – up to 104.5. As for the year of the current exchange rate, every month, starting in May, the Russian currency will become cheaper by about fifty kopecks.

These figures look surprising in retrospect of at least the last five years: for example, in 2018, the Ministry of Economic Development predicted that the dollar would cost 60 rubles, with a view to 68 rubles in 2024. Two years ago, the estimate was adjusted to 78.7 for 2024. In reality, the ruble devalued much more. And now the same officials are seriously considering the possibility of consolidating above the psychological mark of 100. What kind of metamorphosis? 

“There is such a word – “It is necessary,” says financial analyst Sergei Drozdov. – They expected a macro forecast from the Ministry of Economic Development until 2027 inclusive, so the department issued it, quite predictably. In fact, over such a long time distance (and even over a period of a year) it is absolutely unrepresentative: a number of events, both negative and positive, can occur that will affect the exchange rate in any way. In addition, the forecast potentially increases inflation expectations, which means it works against the policy of the Central Bank: the regulator is desperately fighting inflation, which largely depends on the exchange rate of the national currency. Inflation expectations always rise when the ruble weakens, and always fall when the ruble is stable or strengthens.

It is clear that in the historical perspective, the ruble, as the currency of a developing country, will gradually weaken. Nevertheless, it has long periods when the rate actually stands still, without leaving a certain range. Today, the lower limit of the range has been shifted to 90 (at the beginning of the year it was 88), and it is quite logical that until the end of the year the ruble will be in the range of 90-93.5. If the rate goes higher, it will be extremely difficult to achieve the 4% inflation target set by the Central Bank. In this situation, the country cannot do without foreign currency: it is necessary to control the exchange rate. Accordingly, the rule of mandatory sale of foreign currency earnings by exporters should continue to apply. No one has canceled imports, Drozdov sums up.

“The budget is formed based on the scenarios of the Ministry of Economic Development,” says Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers. – Their job is like this: the department is not responsible for reality, but the forecast can always change. They are betting on the weakening of the ruble because the inflation delta in Russia is higher than in the US and Europe. However, a number of circumstances are not taken into account, these are, first of all, geopolitics and the fate of our gold and foreign exchange reserves, frozen by the West. I think that by the end of the year the ruble will be in a wide range of 90-95. We must understand that the budget needs a weak ruble to cover all expenses and plug all holes. On the other hand, there is officially unconfirmed information that the rule of mandatory sale of export proceeds has been extended until April 2025. This measure, which is the prerogative of the government, is fully justified, since it will prevent the ruble from falling too low. The Central Bank has only two levers of influence on the exchange rate – key rate and foreign exchange interventions.”  

In the entire history of the Ministry of Economic Development, it has not had fully realized forecasts, which are also constantly revised, notes the head of the sales and customer support department at Alfa-Forex. Alexander Shneiderman. However, the current one sends a clear signal to the market: sanctions are for a long time, accordingly, Russia and its population will have to live for years with a weak ruble. Most likely, 89-100 rubles per dollar will be a realistic corridor in 2024. In the next one it may be slightly higher, approximately 92-103 per dollar. The forecast allows you to track the vector of the Russian economy for the next few years – this is support for exporters due to the weak ruble.

«The exchange rate (if there are no “black swans” – unexpected news) will be influenced, firstly, by currency control measures, and secondly, by tight monetary – the credit policy of the Central Bank, thirdly, the position of the dollar in the world and the situation on the oil market, says an analyst at Markets Money Power. Sergei Ramaninov. – In such conditions, predicting something even within one year is extremely problematic: the main risks may be known, but no one can predict whether they will materialize, when, to what extent and in what combination.”  

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