What Is Going to Happen with the Rb. Exchange Rate over the Next Half-Year

In next one to two quarters, Ruble will continue its gradual appreciation and within several months the value of the bi-currency basket may hit the level of 33 Rb.
We base our forecasts on oil prices continuing to be above USD 100/b., which should determine high values of the current balance of payments. We also envisage net capital outflow continuing to be in the region of USD 40-50 bln. in annual terms.
This is associated, first, with a traditionally high (5-6% of GDP in annual terms) level of Russian residents’ investment in foreign assets. Second, we do not envisage a notable increase in the inflow of new foreign loans in the non-state sector of the economy. In our forecasts for 2011, we suggest that the value of newly attracted loans should be just at 10-15% greater than the volume of repayment of previous loans.

M. Khromov, research fellow, Structural Policy Department