ALEXEY VEDEV PREDICTS THE RUBLE MOVEMENT PATTERN FOR THE “FATEFUL” MONTH OF AUGUST

Alexey Vedev, head of the Gaidar Institute’s Financial Studies Department, offered his forecast of the ruble forex rate movement pattern for the “fateful” month of August. According to Moskovsky Komsomolets, in line with the evil tradition dating back to the 1998 default, the people always expect the last month of summer to be fraught with threats to the national currency.

“Last week’s increase in the discount rate by the RF Central Bank will help the ruble climb up. According to our calculations, the equilibrium exchange rate at an oil price of $70 per barrel will move within the range of RUB 63-66 per US dollar. In general, theoretically, I would expect some strengthening of the ruble in the near future,” predicts Alexei Vedev.

 “But we can see the ruble being undervalued even alongside a rising key rate. A cheap ruble is good only for the budget and oil companies, because the vast majority of their profits is in US dollars rather than rubles. Manufacturing industries and the people suffer from a cheap national currency. After all, the weakening of the ruble means its low purchasing power and personal income decline,” the expert concluded.