MOSCOW, September 27. /TASS/. The weakening of the Russian national currency from September 1 to 25 is connected with adjustment upwards of the estimate of geopolitical and other risks by financial market participants due to temporary factors, while as they subside the ruble’s exchange rate is projected to get back to its fundamental levels in late 2020 or early 2021, according to the country’s social and economic development outlook for 2021 and the planned period of 2022 and 2023 provided by the Economic Development Ministry.
The average annual exchange rate of the ruble will total 71.2 rubles per dollar in 2020, the ministry believes. "From September 1 to 25 the foreign exchange reached 75.2 rubles per dollar on average, which is related to adjustment upwards of risk estimations by participants of the financial market due to temporary factors. As they exhaust the ruble’s exchange rate is expected to return to fundamental levels at the end of 2020 or the beginning of 2021. The average annual exchange rate of the ruble overall in 2020 is projected to amount to 71.2 per dollar," according to the document.
"Mounting volatility on global financial markets and a plunge of the oil price starting March was coupled with the national currency's weakening. The ruble’s exchange rate rose from 63.9 rubles per dollar in February to 73.1 rubles per dollar and 75.2 rubles per dollar on average in March and April, respectively (77 rubles per dollar on April 23 was the peak level). That said, the balanced macroeconomic policy and a substantial amount of accumulated reserves allowed limiting negative consequences for the Russian financial and forex market," the ministry explained.
Export to support ruble
Russia’s Economic Development Ministry expects growth of external demand for the main Russian export items amid the gradual recovery of the global economy.
"Meanwhile non-oil and gas export will dominate in the export structure (share exceeding 50% in 2021-2023 compared with 43% in 2019). Growth of imports will be moderate (import of goods: +4.3-4.7% in real terms in 2022-2023 after recovery by 5.1% in 2021). Amid this environment surplus of the current account of balance of payments is expected to persist in the whole projected horizon (1.6-1.8% of GDP in 2021-2023), which in its turn will have a stabilizing effect on the exchange rate dynamics," the document said.