The BUSINESS Online daily has published the main theses of the report by Alexei Vedev, Head of the Financial Studies Department of the Gaidar Institute at the Abalkin Readings held in the Fireplace Hall of the House of the Economist on September 27, 2023.

Alexei Vedev has called the current situation optimistic. At the same time, he notes that sanctions remain a factor of risk because over the past 30 years Russia has built an open and more effective import-oriented economy. “Over the past year and a half, the logistics has changed, but a conceptual issue: “what to do?” is still open,” Alexei Vedev notes.

“In my view, the ruble exchange rate is going to be equal to Rb85-Rb86 per $1. If a small portion of Rosneft’s or anybody else’s foreign exchange was sold, the RUR/USD exchange rate would amount to Rb60 or Rb70 per $1. But there is either nobody to sell it to or a different mechanism for imports should be built,” Alexei Vedev says.

Commenting on the rise in the key rate, Alexei Vedev has specified that this situation will make loans more expensive and drive up the development of the internal debt market. “It is clear that more reliable federal loan bonds which have appreciated considerably are changing the balance of saving in the economy and shifting the balance from investment programs to domestic debt funding,” Alexei Vedev says. According to him, the banking sector is mainly oriented at record profits of over Rb 2.5 trillion. “It does not mean that these funds are going to exit the economy, but all other sectors will have to pay this profit one way or another. These costs are quite considerable for the economy as a whole,” Alexei Vedev sums it up.