Factors of the depreciation of the ruble can be. What determines the exchange rate of the ruble. Ruble exchange rate and oil prices

18.06.2014 81 734 48 Reading time: 15 min.

In this article, I want to tell what does the exchange rate depend on, and consider the main factors affecting the exchange rate. As you know, the exchange rate is one of the most important countries, and is very important for effective trading. Therefore, any person who wants to put in order and secure personal finances should have a good understanding of what the exchange rate depends on in order to quickly predict its changes and apply them in practice in order to increase their own financial well-being.

Factors affecting the exchange rate

Trade balance of the state

The trade balance is the ratio of export and import operations. When exporting goods and services, foreign exchange earnings enter the country, and when importing, on the contrary, foreign currency leaves the country. Therefore, if the trade balance is negative, it is biased towards imports (the country imports more than it exports), this always puts pressure on the national currency, its exchange rate decreases, since the country has a shortage of foreign currency. Conversely, when the trade balance is positive, skewed towards exports (the country exports more than it imports), the national currency always appreciates, since the country has an abundance of foreign currency.

However, a positive trade balance is not always good, especially if its balance (the difference between exports and imports) is very large. An overvalued country's currency is just as bad as an undervalued one, and maybe even worse. Indeed, in this case, the cost of its goods grows, and they become uncompetitive in foreign markets. In such a situation, the Central Bank of the country takes actions aimed not at strengthening, but at reducing the exchange rate of the national currency. For example, 2-3 years ago it happened in Japan.

The trade balance is one of the key factors affecting the exchange rate. Ideally, the country's trade balance should be close to zero (that is, exports should be approximately equal to imports) - in this case, the exchange rate will be the most stable.

Macroeconomic indicators of the country

This includes indicators such as the inflation rate, unemployment rate, gross domestic product, etc. Each country calculates its most important indicators, but the main ones are always similar. All these data characterize their directions of development of the state economy and have an impact on the exchange rate. For example, high inflation and unemployment always have a negative impact on the exchange rate of the national currency, and production growth, on the contrary, supports and strengthens the national currency.

The exchange rate is affected by both actual and forecast indicators, and especially sharp jumps in rates can be observed during the release of the indicator, if its actual value did not coincide with the forecast one.

Policy of the Central Bank of the country

The policy of the Central Bank is one of the fundamental factors. Here we should consider several directions of actions carried out by the Central Banks of the states, which have a strong influence on the exchange rate.

Issue of money

In most cases, additional emission stimulates the depreciation of the national currency, because its money supply is growing, which means that the value of money is falling. But not always: for example, the US Federal Reserve System almost “continuously” prints new dollars, and they still continue to be the strongest world currency, since other monetary regulation instruments are correctly used there to curb dollar inflation.

Currency interventions

When the Central Bank needs to strengthen or weaken the national currency, it spends, that is, it sells or buys large lots of foreign currency at a low or high rate on the interbank foreign exchange market of the country, thereby reducing or increasing its value. All this happens at the expense of the state's foreign exchange reserves, so the larger the country's foreign exchange reserves, the more opportunities the Central Bank has to regulate the exchange rate.

Foreign exchange interventions, as a rule, have a temporary effect. For a permanent strengthening or weakening of the exchange rate will require the influence of other factors.

Discount rate

Another regulator of the Central Bank - or the refinancing rate - is the percentage at which the Central Bank can issue loans to commercial banks. The lower it is, the more accessible credit resources, the more loans are issued to the economy, the more goods and services are produced, and, therefore, the more stable the exchange rate of the national currency. Practice shows that countries with the lowest interest rates have the strongest currencies in the world.

Operations with debt obligations

If the Central Bank wants to increase the exchange rate of the national currency, it issues and sells to legal entities and individuals its debt obligations (the so-called state internal loan bonds or treasury bonds) - securities that provide a fixed income and the opportunity to earn on the growth of their value. Thus, he withdraws the money supply of the national currency, it becomes smaller, which means that its value increases. The yield of such bonds is directly dependent on how much money the Central Bank plans to raise, and their reliability is guaranteed by the state.

When it is necessary to reduce the exchange rate of the national currency, the Central Bank, on the contrary, begins to buy up its obligations, increasing their value, thereby increasing the money supply.

Verbal Interventions

Many central bank policy instruments can affect the exchange rate, even if they are not actually applied, but are the so-called. "verbal", that is, voiced only in words. For example, the Central Bank declares that it plans to conduct a major foreign exchange intervention, traders in the markets, in anticipation of the strengthening of the national currency, begin to buy it, and the rate rises naturally, even without the actual implementation of this intervention.

The Central Bank is the body in the state, which is entrusted with maintaining a stable exchange rate of the national currency, therefore, it always has a number of effective levers in reserve, which it uses as necessary and possible.

Large investment projects and foreign trade contracts

Speaking about what the exchange rate depends on, it should be noted, so to speak, the future plans of the state, which are directly or indirectly related to the inflow or outflow of foreign currency. The implementation of such projects may have an impact on the trade balance, and this is the main factor affecting the exchange rate.

The implementation of large investment projects can plan both an outflow and an inflow of foreign currency, large export contracts involve an inflow of foreign exchange earnings, and import contracts - its outflow. If this is planned (for example, contracts have already been approved and signed), further actions may affect the exchange rate.

Public confidence in the national currency

The extent to which the population trusts the currency of their country greatly affects the exchange rate. If people prefer, it means that there is always an increased demand for it, which will have a negative impact on the national currency. And this demand, if it exists, is very difficult to stop. Even if the Central Bank begins to apply its regulators, for example, limits the sale of foreign currency, imposes additional fees on these transactions, prohibits foreign currency deposits, etc., this often leads to the opposite effect: the black market of foreign currency begins to work, where it is sold even more expensive , panic begins among people, currency hype, which leads to sharp jumps in the exchange rate.

During a period of panic, a situation always arises when (even with large commissions) in order to maintain a currency position, which further spins the black market and inflates the exchange rate to unthinkable limits. Surely all of you periodically observe a similar situation.

By creating a rush demand for the currency, people themselves provoke its growth. The preferences of the population and panic moods are very important factors affecting the exchange rate. In some situations, they are even the only ones! (that is, there are no other serious prerequisites for the growth of the foreign exchange rate, but it is growing solely because of panic). As a result, this always leads to the same rapid fall in the exchange rate, and all those who bought the currency at the peak of the panic are at a loss. Therefore, always think carefully, and do not panic in the absence of other factors affecting the exchange rate!

Currency speculation

It often happens that large participants in the interbank (or even global) foreign exchange market deliberately “swing” the exchange rate in order to obtain speculative earnings. Seeing such a case, the Central Bank may intervene in the process, imposing certain sanctions on these participants, but nevertheless, such a situation is far from uncommon, and everyone who is involved has probably seen it more than once.

The so-called "currency swing" can have a very serious impact on the exchange rate, but it will be short-lived, so this situation can be used to earn money, but in no case to transfer your savings from one currency to another.

Force majeure

And, finally, speaking about the factors influencing the exchange rate, one cannot fail to mention force majeure circumstances. For example, military actions, serious protest movements, mass strikes, terrorist attacks, etc. also always have a serious impact on the exchange rate of the country in which it occurs. This impact can be both short-term, if the circumstance is quickly eliminated, or lingering, if it continues for a long time, or has led to irreversible consequences in the economy and the financial sector, requiring a long recovery.

For example, everyone probably remembers that when a major terrorist attack took place in the United States on September 11, 2001, the dollar exchange rate fell sharply around the world. However, this fall was short-lived.

I have only briefly listed the main factors affecting the exchange rate. Of course, you can consider each of them in more detail, but this information will already be enough to navigate the currency pricing and learn to correctly predict changes in the exchange rate, which will allow you to avoid mistakes and will find its positive reflection on the state of your personal finances.

That's all. The site strives to ensure that your financial literacy always meets the requirements of current realities. Stay with us and stay tuned for updates. See you soon!

Estimate:

What can affect the dollar exchange rate and how, what factors put pressure on the US currency and what the USDRUB quote depends on. You will learn about the internal and external factors that form the USD price below.

The dollar exchange rate is of interest to any financier in any country in the world, because it is this currency that has the greatest impact on the global economy, as well as on the dynamics of other monetary units. The position of the dollar is changeable, and in order to correctly predict its movement and get the opportunity to make money on it, you need to know the factors of influence that determine the value of the American currency.

The main influence on the dollar exchange rate in the international market is traditionally exerted, as well as the monetary policy pursued by the American regulator - Fed(Federal Reserve System, FED). At the same time, the dollar, along with the euro, is the world's leading reserve currency, and a large number of countries that keep part of their foreign exchange reserves in American currency are oriented towards its exchange rate. This status of the USD does not provide for a sudden rise in price or reduction in price and is a sign of the high stability of its exchange rate.

Changes in the Fed's monetary policy are always closely related to the economic situation in the States.

For example, strong macro reports increase the risk that monetary policy will be tightened.

Also, such news increases the investment attractiveness of the country. At the same time, both of these factors strengthen the dollar in the foreign exchange market.

The release of negative data on macroeconomics causes a backlash. For example, on October 15, 2014, US retail sales figures came out, which turned out to be weaker than analysts' forecasts: the indicator fell by 0.3% against expectations of 0.1%. The news provoked a powerful fall of the US currency against its competitors, as the forecasts for tightening the monetary policy of the US regulator were lowered.

Formation of the dollar exchange rate in market conditions

The American dollar is the “world currency”, the rate of which is oriented to the vast majority of countries in the world. The process of forming its course is based on foreign economic activity: the agents present in the system of the economy, who are engaged in settlements with foreigners, simultaneously form both the demand and supply of the national currency in the market.

To put it simply, supply/demand is created by only two sides..

Importers. They buy foreign goods for dollars and sell them domestically for the national currency. That is, these are agents of demand for the dollar, which give their own currency for the American one for making purchases abroad.
Exporters. They sell goods abroad for dollars, and inside the country they buy for the national currency or invest in their production. Exporters are supply agents who convert foreign dollar earnings into their own currency.

Accordingly, the demand for the currency grows with an increase in the volume of imports, and the supply - with growing exports. The difference between incoming and outgoing financial flows reflects one of the most important macroeconomic indicators for the dollar, called the trade balance. This indicator may be deficient ( below zero) and surplus ( above zero). Thus, a compromise price is established, at which importers agree to buy American currency, and exporters agree to sell.

Based on the described mechanism, we can formulate the basic rule for the formation of the exchange rate: the currency becomes more expensive when the trade balance increases and becomes cheaper when it decreases. At the same time, it is not the actual (absolute) indicators that are considered important, but the dynamics itself. For example, if the balance in the previous year was -8, and for the current year it was set at -6, then this indicates a positive trend, that is, the depreciation of the currency will slow down. And if the trade balance was +9 and became +7, then, despite the surplus, the dollar may start to fall.

Factors influencing the dollar exchange rate

Events that can influence the position of the dollar in the market can be divided into two large groups.

Domestic political and economic factors of the issuing state - the United States.
Events in the outside world that put pressure on the formation of the US dollar.

Internal events

Internal factors and reasons for the fluctuation in the value of the USD include all important economic and financial news in the United States. In addition, every policy measure that may affect the country's economy must be taken into account.

The factors influencing the dynamics of the currency include the output of economic indicators (indicators, indices). Naturally, not every published indicator will lead to a sharp jump in the rate, but some stand out among them, which are of particular importance and have a strong influence on quotes. They deserve the attention of every market participant.

The list of important indicators includes the following:

Gross Domestic Product Growth Rate Data - GDP(Gross Domestic Product, GDP) USA. This indicator reflects the general situation of the country's economy, its increase indicates an increase in production and services. An increasing GDP growth rate strengthens the currency, while a falling one weakens it.
Index of industrial(Producer Price Index, PPI) and consumer prices (Consumer Price Index, CPI).
Rising/falling unemployment(change in the number of employees, Nonfarm Payroll). Traders do not consider this indicator in absolute terms, but trace the relativity with previous values. An increase in the number of unemployed indicates a deterioration in the economy and leads to a fall in the value of the USD.
country's balance of payments(Balance of Payments).
Import/Export Level. The growing volume of imports indicates a decline in the national economy (the production level is declining, unemployment is growing), which has a negative impact on the national currency. With an increase in exports, the situation changes in the opposite direction. As a rule, this indicator is published as the difference between imports and exports (Balance of Trade).
New home sales(New Home Sales). An increase in housing sales indicates an increase in the purchasing power of Americans, as well as the fact that their housing problems are being solved and they will continue to purchase other goods, which stimulates production growth. Increasing real estate purchases are strengthening the USD.
Durable Goods Orders(Durable Goods Orders). The market is actively responding to this indicator, because it allows you to make a forecast about the future dynamics of the activity of the manufacturing sector.
Oil reserves according to the US Department of Energy(EIA Crude Oil Stocks). The indicator reflects the level of reserves in the country's fuel sector. It has a significant impact not only on the USD exchange rate, but also on the oil market.
Chicago Fed National PMI(Chicago Fed National Activity Index). The essence of the index is that it is the main barometer of the American economy, therefore it strongly affects the fluctuations in the value of the dollar.
Consumer price index(Consumer price index, CPI). The indicator is calculated once a month and reflects the country's inflation rate. It refers to very important indicators, so the market reacts sensitively to its publication.

Another reason for changes in the exchange rate of the dollar are financial factors that characterize the situation in the sector of domestic banking services. Significant among these indicators are:

The degree of stability and reliability of the work of organizations specializing in financial services.
The volume of money supply (Quantity of Money).
The level of the key rate (Interest Rate), interest on securities and others.
The degree of inflation (monitored using the consumer price index, industrial prices).
Level of credit rate (Federal Funds Rate). A decrease in this parameter increases the purchasing power of the country's population, but, on the other hand, causes an increase in the money supply, which weakens the dollar. Data on the rate are announced by the governors of the US National Bank.

The value of the USD is also affected by the policies pursued by the US government. This is due to the fact that any politician has his own special view of the economy, based on which he prepares a program for its development. Therefore, with a change of power, the economic situation often changes very profoundly, which is reflected in the position of the US dollar on the world stage.

In addition, the US currency, like any other, can be affected by events that have no direct connection with either politics or finance.

Such factors include any natural disasters, natural disasters (floods, fires, earthquakes, hurricanes, wars, terrorist attacks, etc.). For example, the market reacted to the news about the tragedy of September 11, 2001 in New York with a large-scale collapse of the dollar against major currencies.

The internal factor influencing the USD rate, which is the most important, is the Fed discount rate. An increase in its level leads to the strengthening of the American currency, a decrease - to a weakening.

External events

External factors are events that affect the value of the dollar that occur outside the United States. The most critical of the external factors is the level of confidence in the currency. The impact of investor confidence is hard to overestimate: its lack may well lead to a collapse of the existing exchange rate, it is enough for one of the largest market participants to refuse to use the dollar as a monetary unit for international settlements.

Moreover, Iraq and Norway have already done this when they began to use the euro when paying for oil.

Another significant factor in pressure on USD quotes are and . The reason for this is the fact that the United States is one of the world's largest consumers of oil. The increase in the cost of this energy carrier entails a steady decline in the dollar. With regard to gold, a similar situation can be observed.

Significant pressure on the exchange rate is exerted by the participation of the United States in various armed conflicts ( Afghanistan, Iraq, Syria) regardless of the results. Man-made disasters and natural disasters outside the United States are also negative factors influencing the USD exchange rate.

What determines the exchange rate of the dollar to the ruble

The exchange rate is called its value as a commodity in the real economy, and first of all it depends on the balance of supply and demand in the foreign exchange markets. Fluctuations in the dollar (), like any other convertible currency, depend on many circumstances, which include internal and external factors. Among the main factors of influence are the decisions of the Central Banks and the monetary policy of the relevant international organizations regarding the currency they issue.

To understand what determines the dollar exchange rate in Russia, it is necessary to answer two main questions.

How does the policy of the country's regulator affect the exchange rate, pushing it in certain directions that differ from the market balance?
How is the formation of the dollar exchange rate in market conditions?

Let's consider the questions in order.

The influence of the regulator on the exchange rate

The main goal of each central bank is to contain the devaluation of the national currency. This position is justified by the fact that if the dollar becomes expensive inside a country, then imported goods also become more expensive, which negatively affects the standard of living of citizens.

World Central Banks, including the National Bank of Russia, have at their disposal a fairly rich arsenal of restrictions that apply to the market rate. Here are the main ones:

Applying a fixed rate. This measure is dangerous for the economy due to the fact that the gold and foreign exchange reserves of the state are spent on holding the value of money. At the same time, the population of the country is not informed about the real market rate.
Establishing a price band. To prevent sharp exchange rate fluctuations, as well as panic tendencies, the regulator sets the upper and lower limits (corridor) of permissible fluctuations. For example, using a corridor with a width of 4%, the Central Bank prohibits the sale of the dollar by more than 4% above or below the average market rate for the current day.
Currency interventions. The Central Bank itself acts as a buyer of currency in the market, replenishing the gold and foreign exchange reserves. At the same time, he plays to increase the rate. He can also act as a major seller, which holds back the devaluation of the national currency.
Key rate setting(percentage of lending to commercial banks by the central bank). An increase in the rate strengthens the ruble, as it increases the number of people who want to keep their savings in rubles. This is due to the fact that the profitability of bank deposits depends on it.

Market factors influencing the dollar exchange rate in the Russian Federation

Citizens of the Russian Federation traditionally treat US dollars with confidence due to their low inflation. However, it should be understood that the dollar is a freely convertible currency, so at some points it is subject to significant fluctuations.

The value of the dollar in Russia largely depends on the market exchange rate of the ruble. Factors influencing the RUB can be divided into two groups: strengthening and weakening. The main circumstance related to the first group is the growth in the cost of crude oil on the world market. This is due to the fact that the profit from the sales of black gold makes up the bulk of the budget of the Russian Federation. Therefore, each jump in the price of this energy carrier has a positive effect on the value of the ruble, lowering the quotes of the USD\RUR pair.

Ruble strengthening factors also include:

confidence in the national currency on the part of enterprises and the population;
increase in domestic production, entailing a reduction in imports;
stable political environment;
foreign investment in the Russian economy.

The group of phenomena negative for the ruble exchange rate includes:

falling oil prices;
panic among the population, provoking a massive buying of dollars and euros;
decline in national production, accompanied by an increase in imports (stagnation of the economy);
refusal of the National Bank of the Russian Federation to carry out dollar interventions;
falling GDP growth;
Western sanctions against Russia;
exchange speculations of large market players;
buying up foreign currencies with its further transfer to offshore.

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And also consider what the exchange rate depends on, i.e. what factors affect the exchange rate.

What is the exchange rate?

Before proceeding to consider the question of what the exchange rate depends on, let's first understand what the exchange rate is.

Exchange rate or exchange rate(Eng. Exchange Rate) is the price of the national currency, expressed in the currency of another country. This price is formed in the foreign exchange market under the influence of supply and demand, which in turn depend on a number of exchange rate factors.

The exchange rate is a price that is set in the national currency for a unit of foreign currency and is determined by the ratio between the national currency and the corresponding foreign currency, based primarily on them. In economics, there is such a concept as for the formulation of which the so-called law of one price is usually used: the price of a product in one country must be equal to the price of a product in another country; and since these prices are expressed in different currencies, this ratio of prices determines the rate of exchange of one currency for another.

There are several types of exchange rates: official, market, exchange, buyer's rate, seller's rate, exchange rate, etc.

Fixed- the exchange rate is set as a fixed value for a certain period of time.
Floating- the exchange rate, which is formed solely under the influence of market factors, i.e. the state (represented by the central bank and the government) does not take any action regarding the impact on the exchange rate.

Factors that affect the exchange rate

The exchange rate depends on a number of factors. In this section, we will review the main ones.

country's balance of payments

GDP dynamics. Growth is a positive indicator for the exchange rate, because. can contribute to the inflow of foreign investment into the country, reduce inflation, etc. At the same time, falling GDP tends to have the opposite effect.

Balanced state budget. , especially if the source of its coverage is additional emission, leads to an increase in inflation rates and, as a result, to a depreciation of the currency.

Public debt level. A high level, especially if external borrowings were used, creates an additional burden on the country's balance of payments, because. in addition to the principal debt, it is also necessary to carry out its servicing - i.e. make interest payments. During periods of significant amounts of payments on the debt, an excess demand for foreign currency is formed, which leads to the depreciation of the national currency. It should also be borne in mind that a high level of public debt has a negative impact on the country's credit rating, which entails an increase in risk and, as a result, an increase in the cost of attracted resources.

Money-credit policy

Implemented by the central bank of the country, is one of the key factors influencing the exchange rate.

Currency interventions. In order to smooth out sharp jumps in the exchange rate of the national currency, the central bank conducts operations on the open foreign exchange market: it sells or buys foreign currency to balance supply and demand, which helps to maintain the national currency at a certain level or in the so-called range. Foreign exchange interventions have a short-term effect.

Interest rate level. The central bank is an indicator of the cost of resources in a country. On the one hand, low interest rates make loans more affordable for businesses and the public, which contributes to the growth of lending, increased consumption, GDP growth, lower inflation and, as a result, the strengthening of the national currency. But on the other hand, lowering interest rates makes the inflow of foreign capital less attractive, and also contributes to the outflow of national capital to countries where the level of interest rates is higher. Therefore, such a movement of capital (especially speculative) increases the instability of the balance of payments.

Regulation of export-import operations. The central bank (sometimes jointly with the government of the country) sets the rules and. The Central Bank may establish restrictions on certain operations, establish special rules for buying and selling currency. For example, during a period of acute payment deficit, the central bank may impose a mandatory sale of export earnings or increase its rate. Similar actions are taken by the central banks of countries with non-convertible currencies.

Money issue. If the additional amount exceeds the needs of the economy (GDP growth), then, other things being equal, such an emission will lead to inflation and a weakening of the national currency.

Financial and political stability in the country

The exchange rate is very sensitive to any destabilizing factors in the country:

worsening;
frequent changes in legislation in the field of business regulation, currency control, taxation, etc.;
change of political regime;
strikes, riots;
armed conflicts and hostilities;
violation of the territorial integrity of the country, etc.

Level of confidence in the national currency

Based on the data of the main macroeconomic indicators and taking into account other factors influencing the exchange rate, the population and business develop a personal level of confidence in the national currency, on which the further strategy of behavior depends. In particular, during periods of economic and political turmoil, confidence in the national currency falls, which leads to the migration of savings from the national currency to more stable currencies and, as a result, to an even greater weakening of the national currency. And this, in turn, leads to a domino effect, and if the central bank does not take active steps to maintain the exchange rate, then the situation can very quickly get out of control - there is a rush demand, which there is practically nothing to satisfy. Under such conditions, the number of speculative transactions increases significantly. This situation is typical for countries with developing economies.

The movement of global capital primarily depends on the level of confidence in the currency.

Conclusion. We examined the main factors that put pressure on the exchange rate. Summing up, I would like to note that two or more factors can have both unidirectional and multidirectional effects. For example, a fall in GDP and political instability will only exacerbate the weakening of the currency, while the trade deficit can be covered by additional investment in the country. It should be noted that other factors can also affect the exchange rate:

large-scale natural disasters (tornadoes, tsunamis);
man-made disasters (accidents at nuclear power plants, etc.);
in Western markets, the exchange rate is influenced by speculative actions of various funds (investment, pension, insurance, hedging);
for the so-called resource-based economies, the dynamics of prices for exported raw materials (in most cases, oil), etc., will serve as a primary factor.

The ruble in certain periods of history (1998, 2008, 2014-2015) showed quite strong volatility. This made the population nervous and massively the US and the euro at their peak value. In such conditions, it is extremely necessary to understand the principles of formation of exchange rates and, in particular, the exchange rate of the ruble itself. Do you want to figure it out? Read our article, in simple language, for "dummies", it is told what determines the exchange rate of the euro and the dollar against the ruble.

The concept and history of the formation of the ruble exchange rate

The exchange rate of the ruble against the US dollar is set by the Bank of Russia on a daily basis on business days. The calculation is based on the results of trading on the dollar / ruble pair. The established rate comes into force the next day. Moreover, today individuals (customers of brokerage companies) can buy foreign currency and withdraw it to their bank accounts directly at the currency trading of the Moscow Exchange. The exchange rates of other currencies against the ruble, which are published by the Bank of Russia, are set based on their exchange rates against the US dollar on the international currency market, as well as on the basis of the official exchange rates of these currencies against the US dollar published by the central banks of these countries.

The exchange rates against the ruble of the countries participating in the economic and monetary unions are calculated on the basis of the official euro-ruble exchange rate using approved conversion factors.

The ruble exchange rate in different years was formed in different ways and has undergone many changes. Thus, since 1999, the Bank of Russia has formed the exchange rate of the ruble in the regime of a managed floating exchange rate. This made it possible to somewhat mitigate the influence of various kinds of external factors on the ruble exchange rate and the country's economy as a whole.

Since 2005, the Central Bank began to use the ruble value of the dual-currency basket, which consisted of the US dollar and the euro, to calculate the national currency exchange rate.

Since 2009, the ruble exchange rate has been formed by automatically adjusting the boundaries of the range of acceptable values for the value of the dual-currency basket. At the same time, foreign exchange interventions were carried out to maintain the ruble exchange rate in the required range. This is the name given to the purchase or sale of a sufficiently large amount of currency in a certain time interval in order to maintain (increase / weaken) the national currency exchange rate in the required range in accordance with the established policy for the formation of the ruble exchange rate by the Bank of Russia.

In 2010, the Bank of Russia abolished the fixed limits for the value of the dual-currency basket, which previously amounted to 26-41 rubles. From that moment on, the rate was formed in a managed floating exchange rate regime, in accordance with which there were no fixed restrictions, but the Bank of Russia carried out its interventions to smooth out strong fluctuations, helping to remove the shock effect on the population and foreign exchange agents. To implement its policy, the Bank of Russia used as a guideline the value of the dual-currency basket, calculated in the proportion of 55 cents and 45 euro cents. Although this cost was floating, it was still subject to adjustment depending on the volume of foreign exchange interventions carried out by the Bank of Russia. Moreover, at the end of the summer of 2014, the acceptable range for the value of the dual-currency basket was 9 rubles.

This policy was implemented until November 10, 2014. Since that date, the ruble has actually moved to a free exchange rate (determined by supply and demand in foreign exchange auctions). The oscillation limits that were in effect were cancelled. Elvira Nabiullina said that although the borders held back the ruble from the pressure of external factors, they carried the threat of additional demand for the currency. However, the Bank of Russia reserved the right to intervene in case of threats to the stability of the economy. Thus, the ruble moved to a floating exchange rate, which is influenced by supply and demand, depending on a combination of both economic and political factors.

What determines the exchange rate of the ruble in Russia

There are a lot of factors affecting the value of the ruble, and the intensity of their influence in different periods may be different. Economic factors include interest rates, inflation and the balance of payments.

Interest rates actually show the value of money - the lower the interest rate, the more actively lending and business development, the greater the money supply. And the more money - so they become cheaper, which means that inflation begins to increase. If interest rates rise, then money becomes more expensive, and starts to slow down, which moves the exchange rate up. But high rates can lead to the stagnation of the economy, as businesses will have to borrow at a higher price.

Inflation is important because it actually shows the cost of depreciating money. Traditionally, investors prefer to invest in currencies with a lower inflation rate. Actually, for this reason (more precisely, one of them), Russians love to keep money in US dollars, where inflation averages about 2%, which is lower than in Russia. It is extremely important to understand the dynamics of the balance of payments - the difference between the amounts coming from foreign countries and going abroad. The fact is that in order to purchase domestic goods and services, foreigners buy rubles, thereby supporting the demand for them. And if the state buys imports to a greater extent, then it has to sell rubles for foreign currency, which reduces the ruble exchange rate. That is, a positive balance of payments moves the ruble up, and a negative one down.

However, other factors can also influence the ruble exchange rate - for example, statements by major political figures and foreign exchange interventions by the Bank of Russia. Also, in a sense, the exchange rate of the ruble depends on the price of oil. It should be understood that if the general vector of economic development is directed upwards, then the currency of a given country becomes more expensive, and if the economy declines, it becomes cheaper.

Conclusion

The formation of the ruble exchange rate is a multifactorial process that may change from time to time. But in order for money to work as efficiently as possible and not become cheaper, it is extremely important to understand how the national currency exchange rate is formed.

I'm sure some would sell their souls to be able to predict the ruble exchange rate. However, few succeed with great accuracy and regularity. Are there people who can give an accurate forecast? Surely those who manage our economy should certainly know what will happen to the national currency. In 2014, the ruble depreciated against the currency twice. Let's first recall what the people responsible for the Russian economy said about the ruble exchange rate.

What did officials say about the ruble exchange rate in 2014?

The ruble began its weakening immediately from the beginning of 2014. In January 2014, the ruble fell against the dollar by 6.8%, and against the euro - by 6.2%. The population was worried about the devaluation, but what did the officials say?

“Recently, there has been some trend towards the depreciation of the ruble, associated with the policy of the Fed and the policy of the ECB. But this process (depreciation of the ruble) will naturally end, that is, when the ruble approaches its equilibrium values, and according to our estimates, it is not far from them, the ruble can move further in any direction, ”Ksenia, First Deputy Chairman of the Central Bank, told Interfax Yudaev.

“Indeed, since the beginning of the year we have seen some depreciation of the ruble, about 3.6%. In principle, this is not much, I do not see any problems here. The policy of the Central Bank of the Russian Federation and the monetary authorities is to make the ruble more and more freely floating. This is absolutely correct,” Finance Minister Anton Siluanov was quoted by Prime as saying.

“I believe that in February-March the ruble should return to the equilibrium rate of 33 rubles per dollar. I seriously think so! Personally, I didn’t run to transfer my money anywhere for 35 rubles - this is crazy! And I really feel sorry for people who buy a dollar for 35 rubles, because the likelihood that they will lose their money is high,” Yulia Tseplyaeva, director of the Center for Macroeconomic Research at Sberbank, told Slon.

“If now there is some stability in foreign economic and economic terms, then the ruble should no longer weaken and the opposite process is possible - the flow of funds from foreign currency to rubles. But this process is not fast,” Vedomosti quotes Finance Minister Anton Siluanov.

"Do not panic. Ultimately, what worries us is how the value of our rubles will change in our country. Since inflation will be under control, by and large, what the exchange rate will be is of no importance,” Russian Deputy Finance Minister Alexei Moiseev quotes the BBC.

“Of course, the price of oil affects the ruble exchange rate, but I would like to emphasize that all these factors operate in a limited period of time,” said Elvira Nabiullina, head of the Bank of Russia.

“You know that today the exchange rate of the ruble is subject to significant fluctuations. Our financial authorities are taking the necessary measures. The Central Bank of the country continues its policy of inflation targeting... The jumps that we are seeing in the foreign exchange market will soon stop,” Russian President Vladimir Putin said.

“Amounts of $10,000 and €10,000 can hardly be purchased even in the largest banks, and, for example, Alfa-Bank does not sell foreign currency at all, Rosbank has a limit on the purchase of foreign currency in the amount of $1,000, and Raiffeisenbank can sell foreign currency. buy only for 100 thousand rubles, Citibank sells foreign currency only to its customers,” Izvestia writes.

And here is the infographic from RBC.

Throughout 2014 and during the panic in the fall and winter, officials did their best to reassure the population, saying that nothing terrible was happening, and there was nothing to worry about at all, the ruble would inevitably begin to strengthen soon. But their words did not help, the ruble continued to fall, and the population panicked. Judge for yourself the accuracy of the forecasts.

Professional analysts also do not know how to accurately predict the ruble exchange rate. So why can neither those who manage the economy nor professional financiers accurately predict the exchange rate of the ruble? To answer this question, just look at the picture below.

What determines the exchange rate of the ruble?

The exchange rate of the ruble is influenced by many factors and events. Conventionally, these factors can be divided into three categories:

short-term
medium-term
long-term

Some factors very quickly affect the exchange rate of the national currency, some slowly and not so noticeably.

Source: presentation by Dmitry Shagardin (MC Energocapital)

Short term factors

These factors affect the ruble at the moment. News, mood (sentiment) of investors, information noise - all this causes short-term fluctuations in the exchange rate. Usually they are small - just a few kopecks a day back and forth. It is on such daily fluctuations that speculators play on the stock exchange. But for this you need to constantly monitor the news feeds and react very quickly to the news that appears in them. In addition, you need to understand well what impact this or that news will have on the ruble, as well as how it will be perceived by the majority of market players. In general, only professional players can earn on short-term courses. However, sometimes the panic of the population, sweeping away currency from exchangers, can greatly affect the ruble exchange rate and even bring it down by several percent.

Medium term factors

These factors form mini-trends - directions lasting from several weeks to months. Analyzing these factors, large institutional investors - banks, investment funds, management companies, corporations, and so on - make their decisions. The monetary policy of the Central Bank has a very strong influence on the ruble exchange rate, the Central Bank is a mega-regulator, which is the largest player in the market and has the most powerful leverage. The Central Bank sets interest rates and conducts fiscal policy. For example, last year the Central Bank allowed the ruble to “float freely”, that is, it abandoned foreign exchange interventions, with the help of which it used to keep the ruble exchange rate in the dual-currency corridor. As a result, the ruble began to seek market equilibrium and found it higher. However, this does not mean that the Central Bank has completely left the foreign exchange market, it still sells and buys foreign currency, which affects the exchange rate.

Low economic growth or a falling economy contributes to an increase in capital outflow and causes a depreciation of the ruble. Economic growth, on the contrary, attracts capital to the country, which causes an increase in demand for the national currency and its strengthening.

The trade balance of Russia is positive, that is, the country exports more goods (mainly oil and gas) than it imports. Buying goods abroad (import) increases the demand for the currency, it rises in price and weakens the ruble. When exporting, the currency, on the contrary, enters the country, it becomes abundant, it becomes cheaper, and the ruble strengthens. Thus, a positive trade balance contributes to the strengthening of the ruble.

Long term factors

Purchasing power parity is the ratio of the purchasing power of the currencies of different countries. According to this theory, for the same amount of money, converted at the current exchange rate into national currencies, the same amount of goods can be purchased in different countries of the world. If a unit of a product in Russia costs less than the same product, for example, in the United States, then it will be more profitable to buy goods in Russia. This causes a rise in commodity prices in Russia and a fall in prices in the US, and the ruble should fall according to PPP.

A large amount of foreign debt has a negative impact on the ruble exchange rate, as the state and corporations are forced to buy foreign currency on the market in order to pay off obligations to foreign creditors. It is believed that the payment of a large foreign currency debt by Rosneft in the conditions of a closed market for external borrowing due to sanctions strongly influenced the depreciation of the ruble at the end of 2014.

Ruble exchange rate and oil prices

And of course, oil prices have the most important influence on the ruble exchange rate. Profits from the sale of oil and gas occupy a significant percentage in the structure of the Russian economy - 30% of GDP and 48% of budget revenues. Low oil prices reduce budget revenues, while high oil prices increase it. Since buyers pay for oil in foreign currency, when the price of black gold falls, the ruble exchange rate weakens, which allows the state to compensate for the decrease in income from falling prices. As for the oil prices themselves, they are even more unpredictable than the ruble.

If you look at the graph of oil and the ruble, then the relationship is noticeable to the naked eye - oil is falling, the rate is rising.

If we compare the price charts for oil and the ruble / dollar, then the dependence looks even clearer.

If we build a set of oil/dollar and ruble/dollar points and draw two regression lines (Y1 - linear, Y2 - quadratic), then both lines will have a coefficient of determination equal to 0.97, which means a high dependence between oil prices and the ruble exchange rate.

However, if you take a look at past years and take the time period from 1999 to 2015, then this relationship is no longer so obvious.

In different years, these instruments did not always behave in the same way relative to each other.

The R2 coefficient indicates the presence or absence of a linear relationship between two variables, and the Pearson coefficient is the degree of correlation: positive when the instruments move in one direction, negative when the instruments move in the opposite direction.

In 1999, 2002, 2004 and 2005, the correlation between oil prices and the ruble exchange rate is negative, that is, they moved in different directions. In 2000, 2003, 2004, 2006, 2010 and 2013, there is no relationship between prices at all. In 2001, 2007, 2008, 2009, 2011, 2012 and 2014, on the contrary, the connection is very clearly visible, and the correlation is positive, that is, oil and the ruble moved in the same direction.

Currency crisis 2014-2015

This picture, taken from Dmitry Shagardin's LiveJournal, clearly shows what and how most influenced the ruble exchange rate in 2014-2015. Here is the war in Ukraine, and sanctions, and the closure of external debt markets, which caused a currency shortage, panic among the population, an increase in the key rate, and much more.

Results

The ruble exchange rate depends on dozens of factors that change over time and differ in intensity of impact. Therefore, it is very difficult to predict the ruble exchange rate, especially in the long term. Not a single bank at the beginning of 2014 gave a correct forecast for the ruble exchange rate. The greatest influence on the ruble exchange rate in 2014 was exerted by oil prices, sanctions and an increase in the key rate of the Central Bank. In my opinion, these factors will continue to exert their influence in the near future. High inflation, falling oil prices, recession will contribute to the weakening of the exchange rate. I don’t see any other factors that could reverse the trend and cause demand for the Russian currency, which means that the ruble will remain in the region of 50-60 rubles per dollar in the near future or continue to fall further.