13 mar
2020
11:22
Markets
For the first time since Q1 2016, the USD exchange rate exceeded ₽75

The coronavirus pandemic and low oil prices cause the weakening of the ruble. Experts are not particularly optimistic: the short-term forecast is for the USD exchange rate to reach ₽76.5.

Yesterday, the USD exchange rate pushed above the ₽75 mark; by dinnertime, the USD/RUB pair traded at ₽75.39, while the exchange rate of euro also increased by 3% and amounted to ₽84.7. Such performance was typical for the market only in Q1 2016.

The stock market is experiencing recession again, since the WHO has named the situation of active spread of coronavirus a pandemic, that is a global-scale epidemic. Exchange rates of currencies of developing economies demonstrated a particularly sensitive reaction to this and the ruble suffers from additional pressure on behalf of the low oil prices. The investors' demand for risky assets has decreased dramatically; they sell their portfolios and head for the safest harbors—dollar and euro.

The Bank of Russia adheres to the budget rule; the volume of currency sales is not too large, only about $1 billion per month.
The ruble finds it more and more difficult to maintain its position in the current circumstances. Further weakening of the national currency is possible due to the negative external conditions. However, experts foresee that, as soon as the markets are stable, the exchange rate will return to the ₽72 mark. In their opinion, at present, the currency market looks more stable than in early 2016 with the same oil price level, thanks to the competent policy of the Russian Central Bank and the sale of proceeds by exporters.

As of this morning, the exchange rate amounts to ₽72.83, but due to the instability, the short-term forecast of analysts is as follows: USD at ₽74.5–76.5, EUR at ₽84–86. The change of circumstances is possible by the middle of the next week when the US Fed takes steps to weaken the national currency.