Russia (bbabo.net), - In mid-January 2022, Brent oil prices are trading around $85 per barrel (near annual highs). But at the same time, the ruble exchange rate is weakening, although in the past, at such prices, the ruble was the leader in strengthening among the currencies of developing countries.

Especially for Rossiyskaya Gazeta, FINAM analyst Alexander Potavin named the reasons for the ruble's subsidence and told when we can expect it to strengthen:

- Geopolitical risks that have begun to appear recently have greatly crippled the ruble. First of all, this concerns Russia's relations with the United States and NATO. It was geopolitics that this week determined the value of Russian financial assets and the exchange rate of the ruble.

In the middle of this week, Russia held talks with the United States and NATO. It became known that they failed to reach agreements on two key Russian demands - guarantees of non-expansion of NATO and the withdrawal of American forces and weapons from Eastern Europe.

Too distant positions of the parties do not allow quickly finding acceptable ways to reach agreements. Such a negative alignment caused an increase in country risks for Russia and sales in ruble assets. The dollar on Thursday jumped to 76.68 rubles, while the euro was at around 87.8 rubles.

At the moment, NATO and Russia have serious disagreements, which, however, should be discussed further. The Russian delegation did not immediately accept NATO's proposals, and now the period of coordination with the governments has come for all parties.

However, Russia still managed to get some concessions from the US and NATO, in particular, to limit the deployment of missile systems and reduce the scale of exercises. The parties also agreed to restore the work of diplomatic missions. But on the most important issues, the US and NATO are not ready to meet the Russian proposals. And Russia categorically does not accept the appearance of NATO military bases near its borders.

At the end of the week, there was also talk of new sanctions. The American package includes: sanctions against Russian financial institutions, a ban on the purchase of newly issued primary and secondary Russian debt. As well as sanctions against all commodity sectors of the economy. In turn, the Russian Foreign Ministry announced the possibility of deploying the Russian military presence in Venezuela and Cuba.

The constant exaggeration in the media of the topic of new packages of tougher US sanctions against the Russian Federation makes Russian assets toxic to foreigners, so the demand for the ruble from investors from abroad is now weak.

In a calm environment, the ruble would continue to trade in the trend of the currencies of other developing countries. Therefore, our basic forecast for the USD/RUB pair for the current year is 71-78 rubles. But now, in a situation of escalating tension, the dollar is approaching the upper limit of this price range.

But the Kremlin still retains an opportunity to continue negotiations. So, there is hope for a peaceful settlement of the problems that have arisen.

In addition to geopolitics, a factor that will influence not in favor of a strong ruble will be an increased volume of foreign currency purchases on the domestic market by the RF Ministry of Finance from January 14 to February 4 inclusive. As part of the budget rule, foreign currency worth 586 billion rubles (about $7.9 billion) should be purchased.

Thus, the daily volume of currency purchases will rise sharply to $495 million against $309 million in the previous month. This is a significantly large value, which will not allow the ruble to strengthen until the beginning of February.

To brighten up the situation, the fact that at the beginning of the year the inflow of foreign currency from the export of the Russian Federation will also grow. The current account balance may reach about $60-65 billion. Against this background, the volume of purchases of foreign currency by the Ministry of Finance does not look menacingly large.

However, by the end of January, one should not expect the Russian currency to strengthen to 72 rubles per dollar, and the upper bar will depend on military-political decisions.

In conditions of calm exchange trading, the following seasonal factor is usually traced in the behavior of the ruble exchange rate. In January, the ruble usually weakens, then in February-March-April, there is more often a strengthening. Then, in May-June, the ruble usually shows a neutral trend, in summer the demand for foreign currency grows due to the fact that the population buys it during the holiday season.

The next wave of ruble weakening usually occurs in November-December.

bbabo.Net