Looking at the quotes of the ruble against the dollar and the euro at the end of 2017, many residents of the country are wondering what awaits the ruble in 2018. Experts differ on this issue. Someone scolds the Bank of Russia for inept and even sabotage actions, others blame the United States for artificially bringing down world oil prices, while others see a conspiracy of speculators in the collapse. Whatever the reasons for the current situation, it is important for everyone who has any savings to understand the forecast of what will happen to the ruble in 2018, where to invest in order to preserve and increase them.
What determines the fall in the ruble exchange rate in 2018
Fewer experts are trying to make forecasts about the ruble exchange rate for 2018, since it is influenced not only by complex processes taking place in the global economy, but also by political, social and other factors.
The main reasons for the weak ruble during 2014-2017 are:
- the fall in world oil prices, on which the size of tax revenues to the Russian treasury depends;
- transition of the Central Bank of the Russian Federation to a floating exchange rate;
- economic sanctions against certain sectors of the Russian economy;
- rise in the cost of loans for large businesses;
- capital outflow associated with the instability of the economy;
- speculative sentiment in business and society.
Most of these factors are practically beyond the control of the country's ruling elite, and the actions of the Government and the Bank of Russia in a critical situation may be unpredictable, and therefore it is rather difficult to say for sure what will happen to the ruble in 2018.
However, let's try to consider possible scenarios that could lead to the devaluation of the ruble or its growth.
What awaits the ruble in 2018: positive and negative trends
1. One of the determining factors for the weakening of the national currency is oil prices. More than half of all revenues to the RF budget come from companies trading in hydrocarbons. If the price of oil drops below $ 40 per barrel of Brent, the state will not receive about a third of the planned revenues. At the same time, even politicians and experts do not allow such a deplorable scenario, the budget for next year was drawn up on the basis of an oil price of about $ 40-50 per barrel.
In the press, one can find assumptions about the artificial understatement of the cost of hydrocarbons and the collusion of the US Government and OPEC oil-producing countries. Experts also stated that if the oil price is less than $ 60 per barrel, many companies will leave the market, as it will become unprofitable to extract raw materials. In particular, the names of American companies selling shale oil, the production of which is much more expensive, were named.
Such a reduction in supply could cause an increase in the price of products of oil companies, thanks to which the ruble could strengthen in 2018. Until the end of 2017, at the congresses of the OPEC countries, at which Russia is an observer, it was repeatedly decided to maintain the level of black gold production, but already from January 1, 2017, it was decided to freeze and even reduce the level of production by oil-producing countries. Therefore, the previous statements of the Minister of Energy of the United Arab Emirates, that oil will be sold even at $ 40 per barrel, can be called hasty and thoughtless.
Obviously, thanks to the signed agreements, oil prices stabilized in 2017 at the level of $ 54-56 per barrel (BRENT), which has a positive effect on the exchange rate of the national currency.
However, trouble should be expected from Donald Trump, who was elected 45th President of the United States, who promised to lift restrictions on the production of shale oil and gas in his country. Additional trash gold supplied to the market may drop quotations, and this will again negatively affect the rate of the Russian ruble.
Thus, one should not expect a significant increase in prices for this hydrocarbon. The most that will happen to oil prices in 2018 is only a slight strengthening to the level of about $ 60 per barrel.
I would like to note that recently the ruble exchange rate has become much less responsive to changes in oil prices, this is because the state is gradually changing the structure of its revenues, which previously depended 80 percent on oil and gas revenues.
2. The Central Bank of the Russian Federation at the beginning of 2015 completely released the ruble into free float, and its price is now set by the market. In 2015, he repeatedly entered trading with foreign exchange interventions, thanks to which the ruble won back several points. At the same time, naturally, the size of gold and foreign exchange reserves was decreasing. The Bank of Russia also raised its key rate several times, but the ruble continued its rapid decline.
Business sentiment became negative as a result of such measures. A high key rate means unaffordable interest rates on loans. Therefore, the Central Bank had to gradually reduce the key rate during 2016-2017. At the same time, there was no tangible drop in the ruble with the key rate cut.
In 2018, 8 meetings of the Central Bank of the Russian Federation are to be held at the key rate: February 9, March 23, April 27, June 15, July 27, September 14, October 26 and December 14.
The position of the ruble may be negatively affected by the fact that the Central Bank is going to buy up foreign currency in 2018 in order to deliberately weaken the ruble exchange rate. On the one hand, it even looks like sabotage, and on the other, with low oil prices, only a high price per dollar will allow the state treasury to receive high taxes on oil and gas revenues. When the price of the URALS brand is 40-42 dollars per barrel, the most optimal cost of the dollar is 64-66 rubles.
By the way, in political circles, there have been talks lately about the nationalization of the Central Bank, which actually does not obey the state and cannot replenish the budget with its gold and foreign exchange reserves, since in accordance with the Constitution it is not responsible for the obligations of the state. Nationalization can play a positive role in strengthening the country's economy, as well as the ruble, provided that the gold and foreign exchange reserves are properly managed.
3. Political processes played an important role in the weakening of the ruble. These are military actions on the border of Russia, and collective accusations of the West of our country of participation in this war, these are also sanctions, as a result of which large domestic companies were left without access to foreign currency borrowing. According to most experts, the conflicts in Ukraine and Syria will drag on for a long time, and therefore the sanctions will continue to adversely affect the economy and the foreign exchange market in Russia. Thus, answering the question of what will happen to the ruble in 2018, we can say that political pressure on our country will continue to influence and increase the rate of the ruble's decline.
There were hopes that the new US President Donald Trump would be able to quickly mend relations with the Russian Federation. However, there is no talk of lifting the sanctions yet, they are, on the contrary, strengthening. Therefore, against this background, it is unlikely that something too positive will happen to the ruble for a common man in the street.
3. The success of foreign currency in the market is ensured in times of crisis by speculators who rush to buy dollars and euros in the hope that the ruble will fall and devalue in 2018. Many exporting companies are in no hurry to convert their foreign exchange earnings into rubles, and the population prefers to get rid of ruble deposits and buy up foreign currency, recalling the events of the 90s.
Mistrust in the national currency and the desire to get easy money amid the fall of the ruble in 2014-2017 increase the demand for dollars and euros. In accordance with the law of the market, an increase in demand also leads to an increase in the value of foreign currency. Also, capital outflow, which is most often invested in real estate and business abroad, has a negative impact on the exchange rate. A decrease in foreign currency available reduces its supply, and as a result, again leads to a weakening of the ruble.
Presidential elections and the ruble exchange rate 2018
Presidential elections will be held in Russia in March 2018. It seems that in order to maintain stability before the elections, the Central Bank will artificially support the ruble exchange rate, and after the elections the situation may change.
The market may react especially sharply to a change in the country's political course, but no expert gives such forecasts.
Is it worth buying dollars and euros in 2018: expert opinion
Most experts believe that the ruble will not further strengthen significantly in 2018, but the national currency is not expecting a serious fall either. Fluctuations are possible at the level of 57-61 rubles per dollar.
This is primarily due to the stabilization of oil prices at the level of 52-56 dollars per barrel, the adoption of measures by the OPEC countries to freeze production.
Maintaining the key rate (8, 25 percent) by the Central Bank at a sufficiently high level, and the development of an industry not related to oil and gas should also have a positive effect.
Since the peak of a significant drop in the ruble exchange rate has passed, fewer market participants will continue to buy foreign currency, large speculators leave the market, so they consider such games to be more dangerous than in 2014-2015.
The currency will be sold in 2018 by exporters, as it will be necessary to pay taxes to the budget of the Russian Federation.
The capital amnesty extended in the President's message to the Federal Assembly may have a positive effect.
And even if the slow strengthening of the ruble may create panic among speculators, who will also begin to sell the currency in order not to miss out on the benefits obtained earlier. As a result, when the supply increases, the prices for the currency will begin to go down.
The purchase of currency by the Central Bank, adjustments in oil prices with an increase in US shale production, and another increase in sanctions against Russia may negatively affect the ruble exchange rate.
In any case, the fall of the ruble cannot continue indefinitely.
Answering the question what will happen to the ruble in 2018 and where to invest money, we can talk about the great instability of the foreign exchange market, the underestimation of Russian money and the danger of large financial losses when buying dollars and euros at a high rate.
Those who have ruble savings are better off investing them in real estate, which is a more reliable asset at all times. If the desire to acquire foreign currency is too high, then you can "put eggs in different baskets" by purchasing different types of foreign currencies, but keeping some of the funds in Russian money. This will help avoid serious losses in the event of a fall in the ruble or another currency in 2018.
