We wrote about the fact that the Chairman of the Central Bank Elvira Nabiullina hinted Russian bankers that it is time, they say, to curtail the Euro the operation — for the reason that the transactions in Euro has ceased to be profitable.
We will remind that earlier a number of the largest banks in the country already began to say goodbye to the Euro: they either reduce the rate (according to the Central Bank, the average rate in September fell to 0.12%), or even abandon the Euro deposits.
By the way, with the Euro are about the same, and dollars, Deposit rates in October crossed the psychologically important level of 1% (with the dynamics down, of course). For comparison, a year ago to put dollars in the Bank can be an average of 3% per annum.
The trend is clear: the hands of the Central Bank, the state gradually gets rid of the currency. From the same series of protectionist tools and the recent statement by the head of VTB Andrey Kostin, who was effusive sentimentality relatively “strong” the future of the ruble.
In fact, I’m sure leading analyst of the Financial research Institute of modern trading Andrew Perekalskiy, such statements are only preparation for the impending devaluation.
“SP”: — do Not you think that the whole world froze in anticipation of a new global recession? We have several articles devoted to the analysis of the harbingers of the crisis: for example, the oligarchs massively selling assets, going to the cache…
— Outline the main trends. The main, perhaps, associated with us-China confrontation. The endless delay in U.S.-China trade negotiations will inevitably lead to their own breakdown and a new escalation in trade and currency wars, because the U.S. goal is to contain China (China) as the only serious geopolitical rival. Dramatic escalation of a trade war will lead to sharp decrease in quotations of high-yielding and risky assets (stock market instruments, commodities, commodity currencies, emerging markets) and the significant growth in demand for defensive assets (gold, Japanese yen, Swiss franc). And with the proliferation of trade conflicts and a further slowdown of the world economy, these trends will only increase.
“SP”: — That is, the probability of a recession high?
— Resume with new force of the us-China trade war (and if you look more broadly, a trade war is the US against the rest of humanity) will raise serious concerns about a further slowdown of the world economy. And, as a consequence, expectations of further growth of protectionism around the world.
All this will inevitably impact on our financial market and the Russian economy as a whole. This negative impact will be mainly through the depreciation of our national currency and the U.S. dollar and the Euro.
“SP”: — it seems to Me, in this situation the term “protectionism” you consume with a negative rating.
— I will explain. The slowdown in the global economy will lead to the desire of governments to protect their markets and call for protectionism. The most striking example of the manipulation of U.S. import duties. But protectionism will lead to even more destructive trade wars that will cause a massive outflow of capital from emerging markets (the Russian market is growing).
New American sanctions against our national debt and is already included in the new US defence budget will trigger an even greater outflow of foreign speculative capital from our market. This, along with the inevitable drop in oil prices, will contribute to the serious depreciation of the ruble and the fall in the Russian stock market and OFZ.
“SP”: — I would not like a new round of “sanctions war” against Russia. But in reality the negative impact of all other factors (e.g., a reduction in price of oil) hard to believe a lot more. What is believed to be in this situation, will the authorities do?
— The Central Bank to support the slowing economy will be forced several times to lower the rate that will lead to a jump in inflation and further pressure on the ruble. The result — currency devaluation.
By the way, our Central Bank has for some time preparing the banking system to such a development: measures to limit the amount of foreign currency deposits in banks, especially denominated in euros.
So the prospects of our national currency, the General economy and welfare of the citizens look very sad.
“SP”: — Costin said that savings should be stored in rubles? Will be stored?
— No, thank you! To keep savings in rubles, to put it mildly, counterproductive. There are no pros and cons — more than enough. Low volatility and stability of the ruble will remain in the past as soon as the world economy will get sucked into a new crisis. And it will happen most likely next year.
The experience of recent years (and even decades) teaches us that, as soon as the top starts to talk about “nepokobelimy” strength and stability of the ruble and urge citizens to invest in ruble assets, this is very quickly followed by a large-scale crisis, accompanied by the depreciation of the national currency and people’s savings. So needless to step on a well-known rake? The question is rhetorical.
“SP”: — If you do not, then what?
— At the moment it seems appropriate to leave the ruble as much as you need to maintain your current consumption. Plus the stock for another three months. Everything else would be wise to convert to US dollars and euros in the ratio 50: 50.
“SP”: — How much will the ruble?
— As for predictions on the rate of our national currency, we can expect the weakening of the ruble against the U.S. dollar to a level 66.70−67.00 rubles per dollar at the end of this — early next year. And 71-72 rubles per dollar by the end of the first quarter of 2020.
And all this — while for Russia, the balance, excluding new geopolitical flare-UPS, a sharp drop in oil prices and political instability.