Starting with Lokdown in 2020, the dollar was at the level of 70 rubles only in June 2020 (well, just a little at the end of October 2021).

And now we were again at these levels, although the economic situation for Russia has changed dramatically. With a high probability, the ruble will weaken to the dollar.

The Central Bank of the Russian Federation reduced the key rate to 14% (immediately by 3%). And according to the forecast of the Bank of Russia, in 2022, GDP will be reduced by 8-10%, and annual inflation will be from 18 to 23%.

Also, the Central Bank sees the space to reduce the key rate in 2022. It can be assumed that it will continue to decline.

Why will a decrease in the key rate lead to a weakening of the ruble?

One of the most important factors of a strong ruble at the moment is:

All these factors will lead to weakening the ruble, so the current dollar exchange rate is interesting to buy. But the weakening will occur with a temporary lag.

The default is canceled

The technical default of Russia, which could happen on May 4, will not happen. Since, the Ministry of Finance of the Russian Federation fulfilled in dollars obligations for sovereign Eurobonds with repayment in 2022 and 2042.

The coupon income was paid and the repayment of the Eurobonds Russia-2022 ($ 560 million), as well as the payment of coupon income by Eurobonds Russia-2042 ($ 84 million). Citibank was a correspondent by the bank.

Up to this point, Russia made payments for its obligations from frozen gold and foreign exchange reserves (SVR).

But later, this loophole was removed, and apparently, the payment was no longer from the GRI of Russia - and this is good, because Russia remains a reliable borrower in the world market.

The binding of the ruble exchange rate is not discussed

Now the project of creating a dual-circuit currency and financial system in Russia is under discussion, where the ruble is provided with gold and commodity and consumer values.

Patrushev emphasized that in order to sovereigntize any national financial system, its payment funds should have internal value and price stability, without tied to the dollar.

And Nabiullina stated that the attachment of the ruble to gold is not discussed. And what do you think, is it worth a ruble to tie to gold?

For today, thanks for your attention!

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