Almost three decades, the US Treasury Department advocated a high exchange rate of the national currency. And suddenly the head of the US department declares that a weak dollar is "that's good." Moreover, there are signs that the weakening of the dollar is serious and for a long time. Why does the US make such a turn and what does this mean for Russia?
The US currency continues to decline - and has already ceded the threshold of 56 rubles to the dollar. Since the morning of Thursday, the dollar has gone down to 55,97 ruble, to 15.38 Moscow time - already up to 55,86 ruble. These are the lows since the spring of 2017. The dollar index, that is, the rate of the American currency in the basket of currencies of six countries, the main trading partners of the United States, is also falling.
With such a weakening of the dollar, investors are playing out the statement of US Treasury Secretary Stephen Mnuchin. On the eve of the forum in Davos, he said that he was not worried about the depreciation of the US currency, which is taking place recently. According to him, a weak dollar - "this is good for the US economy", as it promotes the export of American goods.
This is an extremely unexpected statement. For about 28 years, since the year 1990, the heads of the US Treasury Department have been repeating themselves as a mantra that a strong dollar is in their national interests, the Reuters news agency notes. Therefore, investors regarded Munchin's statement as a US turn from the traditional monetary policy.
"Munchin's words were uttered at a time when the dollar was rewriting three-year lows to a trade-weighted basket. This, it seems, could be the beginning of a new, even more severe phase of the weakening of the US currency, "believes financial analyst FxPro Alexander Kuptsikevich.
But I must say that the US currency has been losing its position for more than a month. Moreover, the trend towards decline was formed at the beginning of last year, and since then the dollar depreciated to the main currencies by almost 10%. "The main reason for this trend is the confidence that the world economy is gaining momentum, due to which other economies and currencies become more attractive. A similar situation was at the beginning of 2000-x - up to 2007-go, "- says Kuptsekevich.
Why did the US Treasury until recently advocate the idea of a strong dollar? Because otherwise the world's largest economy would have experienced extremely serious problems.
"A strong dollar helped the inflow of foreign capital into the US, which is necessary in the light of deficits in the US budget and balance of payments. Now the Finance Ministry hopes that as a result of the tax reform, the capital will be drawn to the United States,
- says the expert.
In addition, a strong dollar was the cause of the huge negative trade balance of the US with almost all trading partners. But a weak dollar will make US exports more competitive, which is in line with the plans of the Trump administration. In addition, when the dollar remains weak, the yield of US government bonds drops and servicing of external debt becomes cheaper, says managing director of IC "Nord Capital" Mikhail Khanov.
Weakening of the dollar will become a long-term trend under a number of conditions, analysts of Raiffeisenbank believe. First, if there is no acceleration of inflation in the US and an increase in the profitability of the UST, secondly, if a large-scale return of American capital to the United States is actually launched against the backdrop of the tax reform, and thirdly, if the ECB begins to tighten monetary policy.
What will this mean for Russia?
We can say that now the ruble is much cheaper than it could be - and the Russian Ministry of Finance needs to thank for this. It is he who constrains the growth of the ruble exchange rate due to currency purchases. Therefore, while a weak dollar does not harm the ruble, says Kuptsekevich. However, undoubtedly, a strong ruble leads to a decrease in the competitiveness of Russian exports. "But it is not yet clear what effect for companies is more: negative because of the growth of expenses in terms of dollars or positive from the growth of quotations of raw materials," the source said. On the other hand, the purchasing power of the ruble is growing, inflation is hampered, and the budget can receive higher incomes in the short term.
The ruble exchange rate is also strengthening against the backdrop of rising prices for Brent crude oil, which for the first time since 3 December 2014 exceeded 71 dollar per barrel. True, the rise in oil prices above 70 dollars is just a direct consequence of the weakening of the dollar. "This proves the presence of a large number of" paper "oil on the market. According to some estimates, it reaches 90% of the total trading volume, "Khanov said. In his opinion, with the end of the heating season, you can expect the price to fall in the range of 58-65 dollars per barrel.
However, for the Russian budget, such prices will be comfortable too. "The central bank will be enough to keep the ruble rate in the range of 55-62 rubles per dollar, and then the budget targets for 2018 year will be successfully met. Undoubtedly, a weak national currency benefits from oil exports, but much depends on the policy of the Central Bank, which can take advantage of the situation and comfortably ease the pressure of the still high rate (7,75%) on the rest of the country's economy, "Mikhail Khanov said.
If in 2017 the increase in oil by 10 dollars in the price (from 40 to 50 dollars) gave the Russian budget an additional 800 billion rubles, in 2018, at an oil price of 60 dollars per barrel and the budget will receive twice as much. In other words, even at an oil price of 60 dollars, the budget's additional revenues this year will be 1,6 trillion rubles. Such calculations were made on Thursday by Russian Deputy Prime Minister Arkady Dvorkovich.