When the ruble becomes stronger against the dollar and the euro, we can talk about its strengthening. The position of the national currency depends on the level of economic development, international relations, inflationary processes, and the cost of oil.
We can talk about the strengthening of the ruble when it becomes stronger in relation to the dollar or the euro during regular trades at the International Monetary Fund. This situation is twofold. On the one hand, it allows to reduce inflationary processes, on the other hand, it can negatively affect the country's economy in the future.
Why is the ruble strengthening?
There are several main reasons for the strengthening of the national currency. One of them is the forecast of a deficit in the oil market. The exporting countries signed an agreement to cut oil production, which makes it possible to maintain a certain price for such raw materials.
The second moment to strengthen the ruble is the peace agreements. Investors hesitate to interact with those countries where there is a danger of major conflicts with other states. For this reason, the ruble weakened against the backdrop of the sanctions imposed by America.
Taxes are also an important aspect. Serious manufacturers and trading companies make money on exports, receiving revenue in foreign currency. After that, they exchange it for rubles to settle with the tax and other non-profit funds. This has a positive effect on the strengthening of the ruble.
In addition, the rate depends on the rates set by the Central Bank. The higher the percentage, the higher the rate of local money. Usually the rates are equal to the rate of growth of prices in a particular state.
Some features of the strengthening of the ruble
Economists say that a stable exchange rate of the national currency is beneficial for business and for the population. Its growth weakens the competitiveness of Russian industries in the world market and reduces the income of exporters. This is especially noticeable in a situation where the ruble increases in price, and the cost of exported energy resources remains at the same level.
There is another opinion: for the majority of the inhabitants of Russia, a strong nat. the currency will become a prerequisite for reducing the cost of imported goods and reducing the cost of domestic counterparts. Thanks to this, it is possible to increase the availability of raw materials and products imported from foreign countries.
Forced weakening and strengthening
The ruble is strongly influenced by the actions of the Bank of Russia, the specifics of operations with gold and foreign exchange reserves. If a country needs to quickly and effectively stabilize the exchange rate:
- strict currency controls are introduced;
- after reaching the desired marks, it is fixed;
- the situation persists until the moment of stabilization.
But this option is used extremely rarely, since it is radical.
The simpler ways to influence the strengthening of the ruble or its weakening are foreign exchange investments. In this case, the Bank of Russia enters the market and begins to actively purchase dollars in reserves. Thanks to this, two tasks are solved at once:
- increase in reserves;
- weakening of the ruble.
Due to the specifics of the Russian budget, a weak national currency can be beneficial. Most income and expenses are generated in different currencies. The state makes a profit on export sales. At the same time, buyers are calculated in dollars, but most of the costs are carried out in rubles. It turns out that the more depreciated the national currency, the more you can get into domestic circulation. The less money in the treasury, the more chances that social spending will be cut. Therefore, experts believe that the strengthening of the ruble is not always good for the state's economy. Most experts believe that the reasons for stabilization are often temporary. Such a situation with a deficit budget is not useful.
Thus, the strengthening of the ruble depends on the ratio of popular currency pairs, how much oil costs, and what is the increase in gross output. If necessary, the Central Bank of the Russian Federation allows the national money to get stronger, it can also make it weaken.
