MOSCOW, January 14. / TASS /. The ruble in 2021 will strengthen to a fundamentally justified level of 65-70 rubles per US dollar, according to the forecast by the new economic survey of Credit Suisse released on Thursday.
"We expect the ruble to return to its fundamentally sound level in 2021. In our opinion, its weakness was caused by temporary factors," the bank's experts believe. The reason for the weakness of the national currency was a combination of several factors, they explained. Among them - the intention of the Russian government to revise tax agreements with offshore countries, as well as a sharp increase in the money supply (the growth of cash and non-cash funds (M2) from the beginning of 2020 to October accelerated from 10.2% to 16.2% year-on-year). The pause in easing monetary policy that started in September 2020 also had a negative impact on the Russian currency, the company added.
"The first factor provoked an outflow of capital, and the second created favorable conditions for this outflow," the bank noted, adding that the main sources of the increase in the money supply were the operations of the federal budget and the specifics of financing the deficit in Q2, when the state profited from the privatization of Sberbank (about 1% of GDP). "Instead of compensating for this increase in ruble liquidity with foreign exchange sales, Russia's Central Bank postponed its operations on the open market until Q4, also offsetting them with foreign exchange purchases deferred from 2018. In our opinion, this created an additional imbalance in the local foreign exchange market. In our opinion, this imbalance was temporary and will disappear in 2021," Credit Suisse said in its survey.
The break in easing monetary policy that began in September 2020 also had an additional negative impact on the Russian currency, the company added.