Is it worth holding out for the dollar and euro hitting 100 as the ruble exchange rate drops to last year’s figures? – April 5, 2023

The increase in fuel prices in the future is expected to lead to an inflow of foreign currency into the country, which will partially offset the budget deficit. The budget’s large volume at the beginning of the year was largely due to prepayments from the treasury, but in April, the increase will be slower, and tax revenues are expected to increase in the first quarter. The psychological factor is also important, as the dollar has neared the acceptable threshold of 80 rubles, and exceeding this may be negatively received by the market. To maintain the exchange rate, the Ministry of Finance may purchase and sell foreign currency. Vladimir Kovalev predicts that the dollar exchange rate will remain in the range of 76-80 rubles, and the euro in the range of 84-90 rubles for the coming months.

— Rising fuel prices in the future will increase the inflow of foreign currency into the country and partially compensate for the budget deficit. Increased budget spending, which led to its large volume at the beginning of the year, was largely due to prepayments from the treasury. In April, they will rise at a slower pace, and tax revenues will increase in the first quarter, Kovalev is sure.

The analyst also noted that the psychological factor is also important: the dollar has already crept close to the threshold of 80 rubles, which the government called quite acceptable for the budget. That is why the market may negatively accept its excess.

– Probably, they will try to keep it, including through the purchase and sale of foreign currency by the Ministry of Finance. In connection with the indicated opposite factors, for the coming months, it is likely that mainly maintaining the dollar exchange rate in the range of 76-80 rubles, and the euro – 84-90 rubles— summed up Vladimir Kovalev.

In conclusion, the rise in fuel prices in the future will have both positive and negative impacts on the country’s economy. While it may increase the inflow of foreign currency into the country and partially compensate for the budget deficit, it may also lead to a drop in the value of the ruble. The government will need to take measures to maintain a stable exchange rate for the dollar and the euro. It remains to be seen how effective these measures will be in the coming months, but the government’s willingness to take action should bring some measure of stability to the market.