MOSCOW. (RIA Novosti financial analyst Anatoly Gorev)
On Tuesday, February 20, the American dollar lost just one copeck against the ruble and on Wednesday it did not yield an inch. Only recently the dollar could lose 10, 15 or even 20 copecks against the ruble in a single trading session. The present situation may seem strange at first sight. Only two months ago, the dollar set another gloomy record: in December 2006 Russians transferred $7.7 billion of their bank savings into rubles. That was the first massive "escape from the dollar" since the fall of the Soviet Union. Just three or four years ago, it would have seemed impossible for an exchange bureau to run out of ruble notes for buying U.S. dollars. What is happening now?
Has the ruble taken a time-out before another climb or has its potential for growth been exhausted? Both Russian financial authorities and experts are leaning towards the second explanation. Analysts say that falling prices on the world energy market have led to a reduced flow of petrodollars into Russia and therefore to an easing of pressure on the American dollar. It should be noted that the price of oil, which accounted for more than 30% of Russia's exports last year, has fallen by more than 26% since its peak last summer, and most importantly, the downward trend continues.
This is a respite for both the dollar itself and Russia's Central Bank, which in the past four years has had to intervene massively in the currency market on an almost daily basis to support the dollar. Using these "injections," the Russian financial authorities have tried to prevent an excessive strengthening of the national currency and a resulting slowdown in industrial growth. Whether they have succeeded is not clear: from the beginning of 2003 until the beginning of this year, the value in nominal terms of the ruble against the dollar increased by more than 20%, from 31.6 to 26.2 rubles per dollar. In real terms, the ruble has strengthened even more, by nearly 50%. Without the Central Bank's intervention, the figure could have been even more dramatic, experts say.
Will the dollar in these new circumstances be able to at least win back the trust of Russians, if not return to its previous position? Analysts are skeptical, saying that the most the American currency can hope for is a respite after many months of steep decline. Certainly, petrodollars are becoming scarcer, but one must take into account the fact that over the past four years the financial behavior of Russians has changed significantly. Evidence of this is not only the record growth in the sale of dollars late last year but also the fact that now more than 80% of Russians' bank accounts are in rubles. Calls by analysts not to "put all your eggs in one basket" and distribute savings equally in rubles, dollars and euros have not been heeded. Russians have begun to consider the once disdained ruble as the optimal financial instrument and the once respected dollar as a "liar currency" that is not worth trusting, at least in the near future.
This consideration is likely to have a major impact on the future fluctuations of the ruble-dollar exchange rate.
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