While the Central Bank is celebrating the victory over the dollarization of the Russian economy, business and the population of Russia increasing investment in foreign currency.
Despite the rise in oil prices, the strengthening ruble and the Kremlin declared victory over the economic crisis, the real sector, as well as citizens of the Russian Federation in 2017 increased their foreign currency investments to the historical record, according to Thursday’s “Comments about the state and business”, Higher school of Economics.
In 2017 the volume of cash foreign currency from non-financial sector reached 54.6 billion dollars – an unprecedented level in modern history of Russia. For six months this amount increased by 7.4 billion dollars, or 15%, and in annual terms – to $ 15 billion, or 37%.
Buying currency is continuous from the beginning of 2016, even in the conditions of falling real incomes and the growth of the ruble, says a leading expert of the “center of development” HSE Sergey Pukhov.
And if the business is forced to keep funds in banks, the population makes a choice in favor of cash dollars, said the head of the Laboratory for financial studies Gaidar Institute Mikhail Khromov.
Although the volume of Bank deposits in foreign currency decreased by 6% in January-October, or 333 billion in equivalent, the amount of cash currency in circulation soared to 660 billion rubles, or 11.3 billion.
Rates on foreign currency deposits is close to zero, and people choose cash to avoid the risks associated with the Russian banking system, for example, revocation of license, says Khromov.
In the statistics of the Central Bank operations on purchase of currency in real sector accounted for as capital flight, reminds Pukhov from the HSE: in 11 months, this indicator grew by almost 4 times and reached 28 billion dollars.
But in fact, people and businesses do the same, and that the Russian government, which has launched a massive program of foreign exchange intervention in February, and by the end of the year buys approximately $ 14 billion in additional oil and gas revenues.
In 2018, the volume of transactions will be increased 3-4 times reported on Tuesday, Finance Minister Anton Siluanov: when oil is above 60 dollars per barrel, the government will buy the currency at 2.8 trillion rubles, or $ 45 billion.
In 2018, “the purchase of currency non-financial sector is unlikely to be reduced in terms of the change of government and economic policy uncertainty,” said Pukhov, and as a result the pressure on the ruble “will increase as the private sector and the state”.
The balance of currency flows in and out of the country will deteriorate: the costs of imports will be slow to increase export earnings to stagnate, and investments of non-residents in the Russian national debt “can be reduced, especially in the case of tightening Western sanctions,” the expert warns.
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