The country’s Ministry of Economic Development says the Russian currency will carry on strengthening against the euro-dollar basket.
Officials believe that the current market situation is beneficial to Russia, especially taking into account the recent turbulence in the financial world and the recent downgrading of the US’s credit rating.
They also noted several positive global indicators, including higher-than-expected US and Japanese sales.
As for the domestic market, investors who took out their money have since understood that the move was premature and returned their funds into the Russian economy.
Financial analysts, however, are skeptical about the ministry’s forecast. They say it is likely that Russia’s trade balance could be negative by 2013 or 2014, especially given the outflow of capital.
“I think there are chances that the ruble will recoup some of its losses, given the fact that the prices so far have been resilient and they are still high,” Yaroslav Lissovolik, chief economist at Deutsche Bank, told RT. “A lot of the risks we are seeing in the world economy are likely to stay for another several months. The volatility we see with the ruble is likely to persist. The Central Bank says people will have to get used to this volatility, and these swings in the ruble versus the dollar. This is something we will have to live with.”
The main factor that drives the value of the ruble is oil and gas, which makes the currency’s swings hard to predict, Lissovolik added.
“This two-way risk makes it very difficult to play on the ruble’s strength or vice versa,” he said.