Reuters: Dollar To Hit 120 Russian Rubles Soon
- 27.11.2024, 15:14
Analysts say this is not the limit.
The Russian ruble has continued to weaken against the US dollar and the Chinese yuan. It has fallen more than 24% since early August, when its current slide began, and could fall further.
This is reported by Reuters.
The ruble fell 0.86% to 106.40 against the dollar on November 27. It was down 0.51% to 14.74 against the yuan, which is also the lowest since March 2022, the first month of Russia's invasion of Ukraine.
The ruble's fall is exacerbated by a more than 20% drop in the stock market since the start of the year, as investors shift their savings from stocks to deposits offering interest above the central bank's base rate of 21%.
“The market is waiting for the reaction of financial authorities to the devaluation of the ruble,” said analysts at the brokerage company BCS, stressing that the purchases of currency “resembled panic in conditions of uncertainty”.
The fall of the ruble is fueling inflation, which is expected to exceed the central bank's forecast for this year, which contradicts the painful tightening of monetary policy by the regulator, with the base interest rate at its highest level since 2003.
According to the central bank's estimates, a 10% weakening of the ruble adds 0.5 percentage points to inflation, which means that a four-month fall in the ruble could add 1.5 percentage points to the current inflation rate.
“For the central bank, this represents a difficult task in combating price growth,” said economist Evgeny Kogan.
Fall Forecasts
Many analysts predict that the ruble exchange rate could reach 115-120 by the end of the year, and some are calling on the government and the central bank to take measures, such as forcing exporters to sell more currency and reducing its purchases by the state.
Analysts note that the fall of the ruble was exacerbated by new sanctions against the Russian financial sector, which disrupted foreign trade payments, especially for oil and gas, leading to a physical shortage of currency on the Russian market.