The official ruble exchange rate does not correspond to the figures in bank exchange offices
Apparently, in the coming days the official ruble exchange rate will neither weaken nor strengthen, remaining around 89 per dollar. Significant changes will almost certainly follow, but not now: the uncertainty caused by the blocking sanctions of the US Treasury against the Moscow Exchange is too great. Meanwhile, in bank exchange offices there is still a parallel, and so far not subject to government regulation, reality: in some places “American” is offered for 100-120 rubles. Moreover, cash dollars are not available everywhere.
Let us remind you that the entry of Moscow Exchange into the American SDN list actually means its complete isolation from the global dollar and euro systems. From now on, exchange trading in these currencies will not be held in Russia. The Central Bank began to determine their official exchange rates to the ruble using a new methodology, using, firstly, bank reports on concluded foreign exchange transactions, and secondly, data coming from digital over-the-counter trading platforms. On Monday, June 17, the dollar exchange rate was set at 89.06, the euro exchange rate — 95.15.
It would seem that nothing particularly terrible happened: companies and individuals can still buy and sell cash dollars and the euro: yes, the exchange mechanism relating to these currencies has disappeared, but the banks remain. The benchmark for market participants is the exchange rate of the yuan to the ruble.
However, in practice, this situation creates a lot of problems, such as the opacity of transactions, additional costs during exchange, a larger spread (difference) between the sale price and the purchase price, and the risks of abuse by credit structures, whose role becomes dominant. In addition, the loss of a key exchange pricing tool is causing confusion in trade: it is not entirely clear how to now correctly determine the cost of goods and services calculated in relation to the dollar. Experts predict that the destabilization of foreign exchange market processes will lead to higher prices for imports and, accordingly, increase inflation, since producer prices (many depend on foreign equipment and components by 80% or more) will increase.
In general, the Russians are presented with another sanctions puzzle, which they still have to learn to solve. It’s too early to relax: from now on, the domestic currency will strengthen and weaken not against the “toxic” dollar and euro, but against the “friendly” yuan, the exchange rate of which will now have to be closely monitored.
«Almost immediately after the introduction of sanctions, the difference between the official rate, which the Central Bank began to set based on over-the-counter trading data, and the quotes that we still see in bank exchange offices became clear,» notes Igor Nikolaev, chief researcher at the Institute of Economics of the Russian Academy of Sciences. «Yes, at first, against the backdrop of the panic moods of that time, it was higher, but this gap remains. That is, it is difficult to talk about a single rate yet; rather, we are talking about two realities existing in parallel. The current rate from the Central Bank does not quite correspond to the picture in exchange offices with the purchase and sale of cash dollars and euros. And I fully admit that there will be no convergence between the two rates — the official and the market. By the way, I believe that the official one will not undergo noticeable changes in the coming week: the ruble may only weaken slightly, say, to 90.»
While uncertainty reigns in the market, while the mechanism of foreign exchange trading is being restructured, rates will remain virtually multiple, and will depend entirely on the internal situation with supply and demand in each specific bank, says Alexey Vedev, director of the Center for Structural Research at RANEPA. According to him, credit institutions will not radically reduce spreads in which they have built up increased risks. It is also unlikely that the ruble will devalue in the coming days, or, on the contrary, will shoot up. In the foreseeable future, the rate will be volatile, staying in a wide range of 85-92, with increased spreads between the purchase price and the sale price.
In turn, the head of the analytical department of BKF Bank Maxim Osadchiy points out the risks of increased inflation. This is due to the fact that the cost of foreign goods purchased for dollars and euros will increase, the logistics of supplies from abroad will become more complicated, businesses will have to come up with new schemes and pay more to intermediaries. In sharply changed conditions, the costs of Russian importing companies to purchase the currency they need will increase.