Without the sanctions pressure, the ruble would cost about 61-68 rubles per dollar; under the most severe version of the US sanctions on the Russian national debt, the American currency could cost more than 80 rubles. However, there are also fundamental reasons for the weakening of the Russian currency. This was announced to Izvestia by Konstantin Asaturov, portfolio manager of Sistema Capital, on Thursday, 15 April.
According to him, among such reasons are the limitation of borrowing opportunities in foreign markets, as well as the overall deterioration of Russia’s economic ties with the world, especially “with its developed part.” All this, according to the expert, results in “lower GDP growth rates, weak or absent exchange of technologies and capital, and a decrease in labor productivity.” In the long term, this slows down the development of the country and hits the national currency.
“In our opinion, the sanctions discount in the ruble is 10–20%, that is, without the sanctions pressure, the ruble would cost about 61–68 rubles per dollar,” Asaturov said.
He predicted that if the anti-Russian sanctions are weakened, the ruble could strengthen to 72-74 per dollar.
Speaking about the tools to minimize damage from sanctions on the Russian national debt, the specialist said that “in principle, nothing needs to be applied here, foreigners no longer participate in new placements.”
“If we are talking about existing issues (in which the share of non-residents is approximately 20%), then we see two potential measures, namely, compensation for the lost volumes by state banks and limitation of future new borrowings on the market. The latter should not hit the budget hard in the medium term, given the current favorable level of oil prices and the already devalued ruble (the ruble price of oil has grown by 32% since the beginning of the year), ”he added.
Sistema Capital suggests that if the situation is very bad, the Central Bank may start selling currency on the market in order to “eliminate short-term negative movements in the ruble” and raise the key rate to “support the national currency”.
“However, this will be advisable only in the event of an extremely negative development of events,” the Izvestia source concluded.
On March 19, for the first time since December 2018, the Central Bank raised its key rate by 0.25 bp. – up to 4.5%. In February, the head of the Bank of Russia Elvira Nabiullina said that the regulator no longer sees opportunities to ease monetary policy.
According to the US presidential administration, sanctions against the Russian national debt will come into force on June 14.
Earlier, on April 15, the White House announced the introduction of new anti-Russian sanctions. The US Treasury has issued a directive prohibiting financial institutions from participating in the placement of ruble or non-ruble bonds on the primary market. We are talking about bonds issued after June 14, 2021 by the Bank of Russia, the National Wealth Fund or the Russian Ministry of Finance. It is also prohibited to provide loans to these structures in rubles or other currencies.