Analyst Osadchiy told how Russians can get rich on the «collapse» of the American currency
After the US Treasury Department imposed sanctions on the Moscow Exchange and its subsidiaries on June 12, the ruble strengthened significantly. By June 20, the official exchange rate of the American currency, set according to the new methodology of the Central Bank of the Russian Federation, fell by 5% at once, to 82.63 rubles per dollar, the European currency fell by 4.5%, to 89 rubles per euro. On Friday, the dollar and euro exchange rates grew, but still remain significantly lower than they were before the sanctions on June 12. What will happen to the exchange rate next? Experts' forecasts on this matter differ sharply. Some financiers expect the dollar to fall to 70 rubles, others predict its subsequent strengthening to a hundred. What is happening on the currency market and how Russians should act in the current circumstances, the head of the analytical department of BKF bank, Maxim Osadchiy, told MK.
— Due to sanctions, Russia Day, June 12, also became “Day of independence from the dollar.» As a result of the imposed restrictions, the isolation of the Russian economy has increased significantly. It is even more difficult to make international payments in dollars and euros.
Well, in financial terms, the Russian market has become overstocked with non-cash dollars and euros. Russian enterprises are trying to get rid of these currencies, which have become even more toxic. “Gasoline on the fire” was added by exporters, who were obliged to credit at least 80% of the received currency to accounts in Russian banks and sell at least 90% of the credited proceeds. It is no coincidence that this requirement, which is destabilizing the Russian foreign exchange market, has already been weakened, and certainly not the last time.
But not everything is fine with the “friendly” yuan: its exchange rate against the ruble is also sagging.
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— After the sanctions on June 12, Chinese banks, due to the increased risk of secondary sanctions, are even more actively refusing to accept payments from Russian banks in yuan. In addition, branches of Russian banks in China, through which large flows of payments for Chinese imports passed, were subject to new sanctions. So far, not a single Chinese bank has come under anti-Russian secondary sanctions, but the risks of this are quite high. Moreover, many Chinese legal entities and individuals fell under the new sanctions. By the way, it’s not at all difficult to fall under sanctions. Here is an anecdotal example from Russian practice: one day in the spring of 2022, a certain lady, deputy chairman of the board of a Russian bank, flew to Dubai on vacation and gave presentations in the business class of the plane on how convenient and easy it is to bypass sanctions with the help of her bank . The presentation got to the US Treasury, and after a short time the bank found itself under American sanctions.
— Perhaps, in connection with the “collapse” of the dollar, the regulator will have to radically reconsider the new procedure for establishing the official exchange rates of the dollar and euro, according to which the calculation of the exchange rates of these currencies is carried out on the basis of over-the-counter information based on information from the reports of credit institutions. Meanwhile, the bulk of over-the-counter transactions falls on the top 5 banks. This concentration of the market makes it easy to coordinate actions within this “coterie” and manipulate rates. It is reasonable to focus on the exchange rate of the yuan to the ruble, and calculate the exchange rates of the dollar and euro to the ruble taking into account data on the exchange rates of the dollar and euro to the yuan on the Forex market.
— The situation is developing close to the September 2022 scenario. Immediately after the announcement of partial mobilization on September 21, 2022, on the then unfulfilled fears of sanctions against the Moscow Exchange and the National Clearing Center (NCC), the exchange rate of the American currency dropped to 53 rubles per dollar. But less than a year later, in August 2023, the level of 100 rubles per dollar was broken.
So we can expect that even after the sanctions on June 12, the “collapse” of the dollar will soon stop, and again the American currency will rise, once again reaching the height of 100 rubles per dollar. After the stupor caused by the sanctions shock, importers will create new supply chains, new ways to circumvent sanctions will emerge, imports will recover, and accordingly, demand for currency will recover, and the dollar will go up. Moreover, no one has yet canceled the budget deficit and the “printing press”. It should also be noted that the “collapse” of the dollar is extremely unprofitable for the Ministry of Finance from the point of view of plugging budget holes, so the state is interested in stopping this “triumph of the ruble.”
— After the cessation of the rush demand for dollars and euros, spreads (the difference between the selling and buying rates) have narrowed sharply. On June 13, one of the banks issued a quote of 50 rubles per dollar for purchase and 200 rubles per dollar for sale. Now there is nothing even close to this: in banks you can find spreads of 1-2 rubles per dollar.
There is no shortage of cash dollars, since channels for their supply have been established, in particular, from Kazakhstan, Azerbaijan and Turkey.
— There is nothing good about this dollar «collapse» for the Russian economy. It means that the domestic currency market has become destabilized. Imports will still become more expensive due to the growing costs of importers for currency exchange transactions and the increasing problems with international payments. The increase in import prices contributes to the growth of inflation. Therefore, at the next meeting of the Board of Directors of the Central Bank on the key rate on July 26, it will most likely be increased from the current 16%, and possibly immediately to 18%.
— I feel sorry for those who languished in long lines on June 13, for example, in St. Petersburg, and bought American currency for more than 100 rubles per dollar. Many of these unfortunate investors, I have no doubt, will sell the dollars they bought during the panic at the current low prices.
— The dollar is falling — so buy it. But, of course, only cash dollars, and avoid foreign currency deposits! When the trend reverses (and it will definitely happen, don't even doubt it!) — you will have a chance to get rich.