How much will the dollar be in February?
Unlike the previous year, the Ministry of Finance is more actively buying foreign currency on the domestic foreign exchange market - prices are now tied to the ruble. The ruble ended last week with a rapid strengthening of its position. According to the Moscow Exchange, the dollar exchange rate at the end of Friday's trading was 56.25 rubles/$, having lost more than 2 rubles over the week. Additional support for the Russian currency is provided by oil prices and the high interest of foreign investors in OFZs.
Dollar exchange rate forecast for February 2018 in Russia, expert forecasts
The ruble has the opportunity to win back some more positions from the dollar and euro. This is facilitated by the ongoing recovery of oil prices. Data on the number of active oil drilling rigs in the US from Baker Hughes published on Friday showed a moderate increase of 7 units, to 798 units. This is significantly less than a week ago, when the number of oil drilling rigs increased by 26 units. The cost of a barrel of Brent has already risen to $65.3. The target for the current rebound is the level of $66.5.
Roman Tkachuk, senior analyst at Alpari
Dollar exchange rate forecast for the week
The coming week does not yet foretell a strengthening of the US dollar against major world currencies.
At the same time, global markets continue to recover and risk appetite has not diminished. And this, in turn, together with a positive current account balance and the expected upgrade of the Russian Federation’s rating to investment grade (S&P) will become additional support for the Russian currency next week. As the external information background improved, the ruble continued to strengthen against the US dollar and euro. Volatility remains low. The oil market is consolidating in a narrow range. The ruble will continue to drift in a narrow range in the coming week of 56–57 rubles. paired with the US dollar.
Vladimir Borisov, Head of Sales of Treasury Products at Absolut Bank
Factors influencing the dollar exchange rate
In December 2017, the population's total demand for cash foreign currency increased by 26% compared to November and amounted to $6.5 billion. The population's demand for dollars increased by 22%, and for euros by 37%.
Dollar exchange rate, forecast for February 19-23
Banks Dollar exchange rate forecast (RUB/$)
Absolut Bank56.00 - 57.00
Binbank55.9-57.60
Globex Bank55.95 - 57
SMP Bank56-56.7
Central Bank dollar exchange rate forecast
Bank of Russia analysts expect that by 2020 the dollar exchange rate in the financial market will be about 68 rubles.
Currently, the American currency is trading at 58.17 rubles, the euro – 71.39 rubles. Russian ruble assets will fall in price due to negative pressure from the energy market, according to one of the reviews published by the regulator late last week.
Taking into account the potential dynamics of prices for “black gold,” the Central Bank decided that the ruble against the dollar would fall over the next two years. In addition to the state of the energy market, Western economic sanctions are putting pressure on ruble assets.
Forecast of the dollar to ruble exchange rate in Russia for February 2018. What will happen to the US currency in the spring? Will the dollar collapse? Read the latest opinions of experts and analysts in the RBC material.
The risk of new anti-Russian sanctions could lead to a temporary weakening of the ruble, warns Danske Bank. Additional pressure on it may come from an increase in the Fed rate, which will entail a strengthening of the dollar.
On the eve of the publication of the US Treasury report on new anti-Russian sanctions, there is a “risk of a temporary weakening of the ruble,” Danske Bank writes in its review. “From our point of view, possible sanctions will be announced by the end of January 2018,” its authors write.
Sanctions are a threat to the ruble in February
One of the possible restrictions from the United States may be a ban on investments in Russian government debt. “If this measure is introduced, it will have a negative impact on the ruble, albeit temporary. It is important to remember that the share of non-residents in Russia’s domestic debt is at a historical high and exceeds 32%,” the review says. But if sanctions do not affect government debt, the risks for the ruble in the short term will significantly decrease, analysts say.
At the beginning of December 2017, Danske Bank predicted the strengthening of the ruble against the dollar in 2018: analysts allowed the exchange rate to strengthen to 52.5 rubles. for a dollar. Now experts write that due to the threat of new sanctions, it is better to sell the ruble.
Hour X for Russia
On January 29, the US Treasury Department is due to submit a report containing, in particular, information about the connections of representatives of big business with the Kremlin. After this, the American authorities may impose personal sanctions against those involved in the report. At the same time, the US Treasury will prepare a report on the possibility of expanding sanctions on Russian government debt, in which it will assess the “potential effect” of this ban on the Russian economy and Western investors. From the end of January, the United States may also impose new restrictions on Russian defense and intelligence enterprises.
It is unlikely that the sanctions will be so large-scale that they will have a noticeable impact on the ruble, says Sergei Romanchuk, head of operations on the foreign exchange and money market of Metallinvestbank, there is no nervousness in the markets. Personal sanctions will not have a noticeable impact on the Russian currency; moreover, they can lead to the return of capital to Russia and become a positive factor for the ruble, he believes. The ruble may ease restrictions on investment in government debt, but their introduction is unlikely, adds Romanchuk. “It would rather be a blow to our own people; first of all, foreign investors would lose money,” explains the expert.
The ruble will not be allowed to strengthen
In January, a record 257.1 billion rubles are planned to be spent on foreign currency purchases. (the increase in purchases is also facilitated by a change in the budget rule formula from 2018). “Our oil prices have increased, and our exchange rate has strengthened a little, we have begun to make currency purchases within the framework of the budget rule, and we will not allow the exchange rate to strengthen sharply,” Finance Minister Anton Siluanov said on January 17.
The ban on investment in OFZs and external debt is the main “black swan” for Russia (a difficult to predict event that has significant consequences), says Bank of America Merrill Lynch. The Central Bank, however, previously conducted stress tests and stated that the introduction of new sanctions would not have a significant impact on the ruble and the banking sector.
According to the Bloomberg consensus forecast, the average dollar exchange rate in the first half of 2018 will be 57.5 rubles. Then, according to analysts, it may strengthen - up to 56.8 rubles. The market may react negatively to new sanctions, but the ruble still remains a stable currency, notes Oleg Kuzmin, chief economist at Renaissance Capital for Russia. However, the ruble should not be stronger than it is now, the expert adds: the dollar, according to Kuzmin’s calculations, should cost 56 rubles. at an oil price of $80 per barrel.
Additional pressure on the ruble may come from an increase in the Fed rate. Danske Bank expects the Fed to raise it as early as March, which will play against emerging market currencies, including the ruble. But in the medium term, the Russian currency will strengthen: according to Danske Bank’s forecast, the dollar will cost an average of 56.3 rubles. over a period of three months, within six months - 55.9 rubles, within a year - 53.5 rubles.
The beginning of February 2018 was a time of serious instability of the dollar against the ruble. The Russian currency grew quite confidently against the dollar at the end of 2017 and beginning of 2018. If in November 2017 the dollar exceeded 60 rubles, then on January 27 it cost only 55.83 rubles. In many ways, such changes are associated with the instability of the “American”. When the instability of the ruble itself is added to this, the result turns out to be completely unpredictable. Forecast of the dollar exchange rate for February 2018 from Russian experts, on which, first of all, the price of the dollar in Russia in February depends.
What happens to the US dollar in early February
In January, at the economic forum in Davos, the negative growth of the dollar was provoked by the head of the US Treasury Department, Steven Mnuchin. Mnuchin said the US could benefit from a slightly weaker dollar, which would have a positive impact on export gains.
Observers were amazed by this phrase - officials of such high rank rarely speak about the exchange rate of the national currency in this way. Investors began to sell dollars, expecting the same decline that Mnuchin spoke about. As a result, the dollar began to decline.
A few hours later, US President Donald Trump joined the situation, supporting the dollar with a statement that there was no currency stronger than it, and that Trump believed in the strength of his currency.
Following these words of the US President, the dollar, if it slowed down its decline, did not do so noticeably. The US Federal Reserve's announcements regarding an increase in the key rate in 2018 also did not help. It was planned for January 31, but the American regulator postponed it, stating only that in 2018 the rate would be increased 3 times.
Oddly enough, the dollar did not rise even after the increase in US Treasury yields. Typically, such news indicates an upcoming rise in the dollar, but not this time. According to analysts, the lack of reaction of the dollar to the increase in Treasury liquidity indirectly shows that the largest investors, for example, the Central Bank of China, have begun to diversify their own portfolios.
What is happening with the ruble at the beginning of February 2018
The growth of the ruble at the end of January is associated with some of the problems described in the dollar. But in the very first full week of February, problems began with the ruble itself.
The main reason is the fall in oil prices, on which the ruble seriously depends.
On February 2, Brent oil cost $69.82. February 8 - already $65.20. Along with it, the dollar exchange rate in Russia also increased - from 56.18 rubles to 57.67 rubles.
The reason for the negative growth in oil is information from the United States, where oil reserves have been increasing for the second week, and production has broken all records.
The decision of the Central Bank of the Russian Federation, which is considering the value of the key rate in Russia on February 9, will also play an important role for the ruble. In December it amounted to 7.75%, a further decrease is planned - by 0.25% or 0.5%.
Dollar exchange rate forecast for February 2018 in Russia: what experts say
Experts rarely publish specific figures. The currency exchange is a very spontaneous phenomenon; rates depend on a variety of factors, and it is almost impossible to predict them. The example of Mnuchin’s statements is clear evidence.
As a rule, experts talk only about general trends in exchange rates under certain circumstances.
One way or another, there are entire analytical agencies involved in making specific forecasts. For example, the Russian APECON posted the following forecast for the dollar exchange rate in Russia for February:
Today, APECON believes that by the end of February 2018, the dollar will cost almost 60 rubles. Naturally, this or any other forecast should be treated with a certain degree of skepticism - anything can change in a month.
The dollar exchange rate forecast for February 2018 excludes sharp fluctuations in currency quotes.
Growth factors for the ruble remain positive trends in the oil market and the recovery of the domestic economy after the crisis. However, geopolitical factors may put pressure on the financial market in the short term.
Optimistic trends
The positive dynamics of the Russian currency is associated with the following factors:
- resumption of growth of the domestic economy;
- rising oil prices;
- political tension in the USA.
The Russian economy continues to recover after the crisis. In 2018, GDP growth will accelerate to 2-2.5%, while inflation will consolidate at 4%. Real incomes have also resumed rising. In addition, the domestic currency will be supported by an increase in the cost of “black gold”.
The reduction in oil production ensured a steady increase in oil prices. At the beginning of 2018, the cost of a barrel exceeded $65, which corresponds to the optimistic forecasts of analysts.
The forecast for the value of the American currency for February 2018 takes into account the growing political uncertainty in the United States associated with the policies of Donald Trump. The new president's migration policy is causing a storm of criticism from political opponents. Over the past year, the dollar has lost about 7% of its value against a basket of major currencies; this trend will remain unchanged this year.
Optimists expect a further depreciation of the exchange rate to 53-55 rubles/dollar. However, analysts note factors that could hinder this trend.
New challenges
Representatives of Nordea Bank admit a moderate devaluation after the expansion of American sanctions. New restrictions from the US Treasury may prohibit investments in the Russian government debt, which will lead to a decrease in the value of the domestic currency by 5-10%. In addition to the tightening of the sanctions regime, the following factors will play against the ruble:
- Increasing foreign exchange interventions by the Ministry of Finance. At the beginning of 2018, the department intends to increase the volume of currency repurchase on the market.
- Increased geopolitical tensions.
- Significant payments on external obligations.
The Ministry of Finance continues to buy foreign currency at a record pace, which is recorded in the budget rule. The agency converts additional oil and gas revenues into dollars, which is reflected in foreign exchange market trends. In January, more than 250 billion rubles will be allocated for these purposes, which is an absolute record.
The fiscal rule will help overcome the cyclical development of the Russian economy, officials emphasize. However, in the short term, the Ministry of Finance's active operations in the foreign exchange market will lead to an increase in the dollar exchange rate. Such a policy will lead to a correction of currency quotes to 57-60 rubles/dollar, predicts B&N Bank representative Natalya Vashchelyuk.
Geopolitical factors remain moderately unfavorable for the domestic financial system. Tensions related to the development of the DPRK's nuclear program are leading to a deterioration in US-Russian relations. In addition, the development of the Ukrainian crisis in the near future may enter an acute phase.
January payments on external obligations will be 15% higher than the volume of payments for December 2017. Peak load will increase the demand for the US currency, which will affect the movement of quotes.
Another factor that will affect fluctuations in quotes is a reduction in the key rate of the Central Bank. The regulator's policy leads to an acceleration of the outflow of speculative capital, which worsens the position of the Russian currency. However, representatives of the Central Bank believe that the change in the key rate will not affect the stability of the exchange rate.
The key factor for the dollar exchange rate in the near future will remain the dynamics of oil prices. The oil price forecast for February 2018 remains moderately favorable for the ruble, but does not exclude another collapse in the cost of a barrel, which will affect exchange rate fluctuations
Oil trends
At the beginning of 2018, the oil market is updating local highs, which is associated with a reduction in supply. Limiting oil production eliminates the oversupply of the market, which is the key to a sustainable rise in the price of “black gold.”
The extension of the OPEC+ agreement reduced the pressure on oil prices. Market representatives feared an increase in shale oil production in the United States, but the actions of American companies did not prevent prices from rising. The gap between supply and demand continues to narrow. Further development of this trend may create a deficit in the oil market, which will ensure a more significant increase in prices.
In addition to supply factors, oil prices are supported by the revival of the global economy. The Chinese economy maintains stable growth rates, which has a positive effect on oil demand.
In such conditions, experts consider the three most likely scenarios:
- The basic forecast is the cost of a barrel at 68-70 dollars per barrel. This scenario assumes that the exchange rate remains within the range of 55-57 rubles/dollar.
- The optimistic forecast is that the price of a barrel will rise to $75. As a result, quotes will drop to 53-55 rubles/dollar.
- The pessimistic scenario is a price correction to $60 per barrel. A decrease in oil prices will lead to a strengthening of the dollar to 58-60 rubles/dollar.
Dollar-ruble pairs have been attracting the attention of analysts and traders from all over the world for several years now. Due to the events that have occurred in the last 2 years, the value of the dollar against the ruble has begun to rise significantly.
Such actions fundamentally changed many international trade transactions. The commodity market, which mainly provided the domestic currency with support, has begun to significantly reduce turnover over the past 15 years. Due to political tensions, sanctions have emerged that force, through an economic embargo and notes of protest, to force the Russian political system to change course.
However, the domestic government is in no hurry to agree with the opinion of its Western colleagues and continues to promote its policy towards a number of foreign countries. This leads to the fact that one can observe how the political sphere has actively affected the price segment of the market in recent years, as well as the value of the dollar-ruble currency pair.
How the dollar exchange rate has changed over the past 5 years
Just five years ago, Russia had serious economic contracts with many European and Asian countries. This situation provided an excellent reason for the growth of the national currency. With the development of the raw materials industry and the supply of natural products to other countries, a serious and positively developing investment climate has been created.
So in 2012, a dollar-ruble pair cost around 31 rubles. Such a low cost by international standards had a great impact not only on international relations, but also on the social sphere within the country. All imported goods did not have much value, and wages and other various benefits began to grow steadily. This generated even greater demand for the currency and a natural increase in its liquidity.
Many foreign companies began to actively invest in the ruble, which generated even greater demand for it. This situation continued until mid-2014. In conditions of actively developing infrastructure, the ruble has significantly strengthened its position and made it possible to create a favorable economic background for development.
However, from the end of 2014 to the beginning of 2015 due to international proceedings and the first political conflicts. Response measures were developed that were not only political, but also economic in nature. As a result, for this period of time the cost of the currency pair was 60 -62 rubles per 1 dollar. That is, in just a few months, the American currency has doubled in price.
The record price was in 2015, which at auction amounted to 83 rubles. In 2016-17, there was slight progress in relations and the emergence of new contracts, which influenced the reduction in cost. So today the average price of a pair is 49-52 rubles.
Are there prerequisites for growth?
Analysts do not give much positive forecast. This is due to the sanctions introduced at the beginning of 2018, which will affect some large domestic enterprises and corporations. As a result, this may lead to an increase in the rate and a decrease in the revenue side of both domestic production and the social sector.
What affects the ruble to dollar exchange rate?
Currency pairs today are influenced by various not only economic factors, but also political ones. The liquidity of a monetary unit is a significant indicator that redefines its value. If the demand for a country's currency is small, then the ratio to the value of the pair will be low.
Also, with the development in a negative direction of political relations with a number of countries, it became possible to determine that international economic relations in the raw materials and production sectors will be insignificant, and this also affects the value of the domestic ruble.
Dollar exchange rate forecast for February 2018
Due to the sanctions imposed by European and American countries at the beginning of 2018, analysts do not give clear and positive forecasts. The new measures being introduced will seriously affect many domestic companies and their foreign branches. As a result, such actions will lead to a decrease in the dynamics of the ruble movement and an outflow of even greater capital abroad. This will set the price for February 2018 at 68-75 rubles per 1 US dollar. Further ascent is planned. Starting from the 3rd quarter, the dollar will begin to decline against the ruble.
Which currency is better to invest in?
Most investors and traders do not approve of the aggressive movement of unstable pairs due to political infighting. As a result, it will not be easy to predict their movement or give an accurate forecast. Since the price will be affected by every negative or positive news.
As a result, there is an increase in investments in currencies that are calmer and independent of political international arenas and imposed sanctions and retaliatory measures. Such currencies include British pounds and Swiss crowns.