ALEXEI VEDEV: “USD EXCHANGE RATE FLUCTUATIONS ARE TEMPORARY”
Alexei Vedev, Head of the Financial Studies Department, Gaidar Institute, highlighted points of interest of the last week—plunge of the American economy, volatility of USD exchange rate, and shared his projection on the duration of these fluctuations at the meeting of debating club “Fingazeta Club”.
“Problems related to both USD and all other currencies are clear. In other words, economies are facing challenges. Suppressed domestic demand, suppressed external demand, which should be stimulated in some way. Q2 statistical data for America has been released. It surprises, you bet. Taking into consideration the fact that the USA, Holland, and Sweden are the best in the statistical data, 34% is certainly too much. I don’t believe in it, the same as I don’t believe in 10% of the decline in the Russian economy, which is also laughable, but we can’t boast of the quality of our statistics. I think that the range of 12-18% should be worldwide. Because, challenges are approximately the same everywhere.
Naturally, America has been stimulating domestic demand. They are about to adopt 2nd relief program. Without doubt, such all-out emission will definitely affect investors. They turn to gold, to less risky assets, etc. However, I trust more American experts who objectively don’t expect inflation above 2% in coming 3 years. And, certainly, all efforts—taken rather boldly, to their credit—they focus on stimulating domestic demand since nothing can be done with the external one.
Consequently, I think that these fluctuations are temporary. We can refresh our memory about the 2008 crisis. Then, expectations still were more alarming—but nothing happened. I think that the American economy will get momentum and investors’ preferences will get back on track.”
Naturally, America has been stimulating domestic demand. They are about to adopt 2nd relief program. Without doubt, such all-out emission will definitely affect investors. They turn to gold, to less risky assets, etc. However, I trust more American experts who objectively don’t expect inflation above 2% in coming 3 years. And, certainly, all efforts—taken rather boldly, to their credit—they focus on stimulating domestic demand since nothing can be done with the external one.
Consequently, I think that these fluctuations are temporary. We can refresh our memory about the 2008 crisis. Then, expectations still were more alarming—but nothing happened. I think that the American economy will get momentum and investors’ preferences will get back on track.”