Why the dollar is growing and the ruble is falling: reasons and analysis
Mar 17, 2018
The reasons for the "course fever"
Is there any reason to worry?
Reasons for "exchange rate fever"
Probably everyone starts today from reading news feeds and getting acquainted with fluctuations of the ruble exchange rate against the dollar. Let's look at it from the point of view of the common man, why such a jump in the rate occurred and why he is beating more and more records.
The official reason for the imposed sanctions: the accession of the Crimea to the Russian Federation, which previously was part of Ukraine, as well as Russia's support for the unrecognized republics of the People's Republic of China and the People's Republic of Yugoslavia( South-East of Ukraine).We will not go into the causes and nuances of all these processes, we will take this as a fact. But many experts and analysts are inclined to believe that the causes of "Crimea, the People's Republic of China and the People's Republic of Germany" are just entourage, in fact, ordinary geopolitics is hidden here. The US needs to work on Russia, and then there was an excellent opportunity to introduce everything conceived.
The United States was the initiator of all sanctions. In view of its world leadership, America worked on the EU, which was reluctant to also impose sanctions against the Russian Federation. These sanctions have had a negative impact not only on Russia, but also on the EU itself.
The United States is interested in the fact that the state debt of the country is colossal, and Russia is gaining momentum in the world arena and is quite a serious competitor for "debt America".On the state debt of the USA and state debts of other leading countries, journalists Vse-Sekrety.ru will tell a little later.
Sanctions can be considered a simple revenge of the United States, because in their opinion, the perfectly planned "revolution" in Ukraine( coup d'état) was not particularly smooth. Not only did the State Department get the Crimea right from under its nose, America wanted to turn out the Black Sea Fleet of Russia and make the NATO base, so there were problems with the Donbass( South-East of Ukraine), in the north of which they wanted to extract shale gas. America's plans included the fact that after the coup, Russia continued to support Ukraine in every possible way, by means of loans, discounts, benefits and other economic concessions, but the Russian Federation took a clear and unshakable position to follow its national interests and protect the Russian-speaking population of the Crimea and Donbas.
The impact of sanctions is more pronounced in the fact that European banks do not give long-term loans to large businesses. Against a number of individuals and organizations, personal restrictions have been introduced that affect business in general. Many concluded deals and agreements were in question, and new ones were frozen.
A number of factors related to oil also had a reflection on the course. To annoy Russia, and in the paradigm of all the same sanctions against it, the EU lifts long-term sanctions from oil from Saudi Arabia, which, in turn, lowers its price, which reaches a record minimum level. This dumping of prices affected our economy and the sale of our own oil products.
Affects the price of oil and the ruble exchange rate, respectively, in light of pessimistic forecasts about the growth of the world economy, Russia and the United States are increasing their oil production.
Demand, rush and deficit
The catalyst for the growth of the exchange rate was demand and excitement for the currency itself. First of all, this concerns a large business oriented to the West, which has foreign currency loans. In view of the fact that the end of the year, there is less time to pay off debts, so business needs currency. That is why there is a great demand for dollars.
Buy American currency and large trading companies, whose business is focused on imported goods purchased for the currency, of course, the American. In addition to the fact that they need a large amount of currency, they increase purchases, because everyone is afraid that the dollar will continue to grow, so they are stocked in advance with the goods until the "green" is even more expensive.
Sale of Russian Assets
Representatives of large Russian capital began to actively sell their business abroad, mainly in the EU countries. Some have fallen under sanctions, some are afraid of them, and some simply did not consider business in Europe as promising. This situation, of course, affects the economic component of our country.
The speculators who have a thirst for profit on currency speculation make their own contribution: buy now cheaper, and then sell more expensively. As a result of buying up a large amount of currency, as well as selling it at an inflated price, there is a negative impact on the rate.
Strengthening of the dollar
The ruble also falls against the background of the global growth of the dollar. There will be no more significant growth of the US currency, the debt burden of the US simply will not allow it to do so.
Completes this whole set of reasons - usual panic. Some, in a fit of panic, against the backdrop of the inexorably changing exchange rate of the ruble, flee to the exchangers and buy up the currency, while others predict a rise in prices against the cheap ruble and simply create this panic, which contributes to panic in society.
Is there any reason to worry?
With the reasons everything is clear, but what's next? Is there any reason to worry and panic?
Who will suffer?
If you are connected with a dollar, for example: a business is connected to a dollar, and you buy goods abroad, you have a foreign currency loan or you often travel and rest abroad, then in such cases the situation is really complicated.
Also, the situation with the exchange rate has a negative impact on those who have large enough savings in rubles - they have lost a little.
For the majority of the same people in our country, the fall of the ruble and the growth of the dollar will be affected more by the growth of prices for foreign goods: machinery, cars, things and other goods. As for the goods of national production, the fall in the exchange rate for them will be insignificant.
The state debt
The US national debt exceeds $ 17 trillion, which according to various sources is about 110% of GDP.With such debts, the dollar is doomed, it just keeps on using what the whole world enjoys and can not refuse it yet, although the BRICS countries( Brazil, Russia, India, China, South Africa) create their world bank, whose work will be based on the yuan -the national currency of China, which has the most powerful economy in the world. This will help make the yuan an alternative reserve currency and reduce the dominant position of the dollar on the world stage.
No less interesting picture of public debt in Germany, France and the UK:
This is the graph of the national debt of the most developed countries of the EU.
As for Russia's national debt, it does not exceed 15% of GDP, so there is no reason for panic and worries. The ruble exchange rate is under control, and in the near future the dollar will stop its constant intensive growth. A series of measures in the economy by the government and the actions of the Central Bank - stabilizes the course, experts assure.
No reason to panic
Nevertheless, today Russia has to rebuild its economy. For more than two decades, the economy of our country depended on the "oil needle", that is, from the sale and prices of oil and gas. Today's realities force us to rebuild our economy and disperse it from oil and gas resources. What plan of restructuring the government will take - let's see. The main thing is that the state has a "safety cushion", which will help to safely survive the state this period financially.
For a month, one of the most discussed problems in the society is the fall in the ruble exchange rate and the appreciation of the dollar. The course hit records for several days in a row, and the reasons for this are sanctions against Russia, a drop in oil prices, demand and a deficit on foreign currency, the sale of Russian assets abroad, the world dollar exchange rate growth, currency speculation and panic among the population. About these reasons, and also about whether it's worth worrying - we'll talk further.