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Rouble continues to decline

June 21, 2013, 10:27 UTC+3
Some Western publications suppose Russia will allow the rouble to weaken with the aim to revive its economic growth
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The Russian currency continues to lose weight. In the past few days, the rouble went down almost three percent. For this Friday, the official Central Bank rate is 32.73 roubles to one dollar, lower than the minimum level it dipped almost a year ago. The Central Bank remains calm. However, U.S. Federal Reserve Chairman Ben Bernanke's words about a banknote printing halt in 2014 have only worsened the situation.

Analysts and experts say there may be several causes of the possible domestic currency decline (according to the preliminary forecasts, by one-two roubles), the Moskovskaya Pravda writes. Some Western publications suppose Russia will allow the rouble to weaken with the aim to revive its economic growth. Some domestic analysts believe the currency shake may be caused mainly by the fact that participants in the meeting with the president did not support the proposal for the Central Bank to share the responsibility for economic growth equally with the government. There is a view that the rate was shaken by the unusually early beginning of the Finance Ministry's currency buying at the open market for the transfer to the Reserve Fund. Another view is that the weaker rouble is needed to replenish the federal budget.

For the first time in the past five years, U.S. Federal Reserve officials said about the completion of the programme for quantitative easing (in fact, bringing unsecured banknotes into economy), the Moskovsky Komsomolets writes. Ben Bernanke stated the United States would stop to print dollars when the unemployment rate lowered to seven percent. It is 7.6 percent at present. According to Bernanke's forecast, the unemployment rate would stand at 7.2-7.3 percent in the fourth quarter of this year. Thus, it is likely that the printing may be stopped already next year. Markets reacted to the statement with declines, and the rouble also fell down. The period of cheap money has come to an end. After the statement, the dollar began to strengthen against all the world currencies, and the rouble became cheaper. The Russian currency reacted most painfully and dropped by 61 kopecks to a dollar and 37 kopecks to a euro. The Central Bank rate for June 21 was set at 32.73 roubles to a dollar and 43.40 roubles to a euro.

Even a short-time fall of the national currency is a big problem for Russians, the Rossiiskaya Gazeta notes. Particularly in summer, since many like to go on holiday abroad. However, this year, many citizens seem to have stored up dollars and euros beforehand. The Central Bank reported a high demand for them in April, when Russians bought 8.3 billion dollars’ worth of foreign currency. The demand rose 26 percent for the American currency and five percent for euros in April 2013 as compared to March. The growth was particularly noticed as compared to the data of last year when the demand for dollars declined eight percent. However, with all the interest in the foreign currency, there was no growing demand for dollar and euro deposits as compared to rouble accounts. There was no stable trend either to increase opened euro-dollar deposits.

 

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