The ruble continues to strengthen and reached 65 rubles per $ 1 for the first time in 2 years. How much more will this growth continue? Will the oil embargo stop this crazy growth?

Oil embargo

The main obstacle to the embargo was the tough position of some countries. Hungary is the most stringent position, she is ready to support the embargo only if it is excluded for supplying pipelines (that is, the embargo will be imposed only on sea supplies).

But Hungary has no access to the sea, and almost all of her oil, she receives friendship through the oil pipeline. Therefore, under such conditions, the embargo will not affect them at all.

The EU is going to abandon Russian oil until the end of the year. And the Czech Republic and Slovakia are asked to increase the transition period to 3 years for them.

In principle, they have the same situation as Hungary, they have no access to the sea and receive all oil through the friendship oil pipeline.

Bulgaria is also opposed to the embargo. But she has a better situation, she has access to the sea, has ports and can replace Russian oil with sea supplies from other countries.

Given the positions of these countries, most likely, the embargo will only be on the import of oil from Russia by sea. But this is already significant, because, most of the oil to Europe from Russia comes precisely by sea.

But suppose that nevertheless, the EU (in the coming days) will approve the embargo, this will not lead to the collapse of the ruble, since the ban on imports will entered only in early 2023.

And in the short term, the embargo, on the contrary, will positively affect the growth of Russia's income due to the fact that the introduction of the embargo will lead to an increase in oil prices.

But in the medium -term and long -term perspective of the embargo, of course, it will have negative consequences. For example, the Rysted Energy energy agency predicts that due to the embargo, oil production in Russia will fall (and by 2030 it will fall to 7.5 million barrels per day).

Disconnecting from SWIFT

Also, in the 6th package there will be sanctions against banks. The EU is going to disconnect from SWIFT and Sberbank. Previously, blocking sanctions were imposed against him, but he was not disconnected from SWIFT.

In addition to Sberbank, Swift will turn off 2 other large banks (according to rumors, these will be the ICD and Rosselkhozbank). So, there will be practically no banks from SWIFT in Russia.

Of the large, only Gazprombank will remain, from the smaller ones - Rosbank and Tinkoff Bank. Alfa-Bank from SWIFT is also not disconnected, but blocking sanctions are imposed on it.

FRS rate

In addition, at a meeting of the US Federal Reserve, the United States raised a key rate by 0.5% (from 0.25% to 0.75%). An increase in the rate will positively affect the dollar, and it will be strengthened in relation to other currencies, but not to the ruble, since the Russian market is now isolated from the world market.

Thus, neither the introduction of the oil embargo, nor the increase in the Federal Reserve rate, will now instantly roll the ruble.

Nevertheless, this will be done by the Central Bank of the Russian Federation, since at its last meeting the Central Bank proposed reducing to 50% of the sales of foreign exchange earnings for raw materials exporters and resurrect for non -people.

This measure will probably be accepted in the very near future (most likely after the May holidays). Because, such a strong ruble is not beneficial to the government.

The Minister of Finance - Siluanov predicts that the federal budget of Russia in 2022 will be executed with a shortage of about 1% of GDP.

In fact, this is not so much. For example, in 2020, the budget deficit was about 4% of GDP, but then energy prices were very low, and now they are very high.

Therefore, the chances that the Central Bank itself will begin to weaken the ruble are very large (in order to prevent a large budget deficit). And we can only buy currency.

For today, thanks for your attention!

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