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Forecast: Exchange rate in Russia will be maintained in next half year

Forecast: Exchange rate in Russia will be maintained in next half year
Russian economy needs radical reforms for a sustainable growth

Baku. 18 July. REPORT.AZ/ The dollar exchange rate in Russia within next six months will remain stable in the range of 57-62 RUB/USD. Analytical Group of Report believes, at least a slight increase expected in the economy of the country this year. Thus, according to the forecasts of the Bank of Russia and the Ministry of Economic Development, this year GDP growth is expected at the level of 1-1.5%. The stability of the ruble will also support oil prices in the range of 40-55 USD/barrel.

Next year, oil prices are projected to decline due to the end of the OPEC + agreement and the expansion of oil production by a number of countries led by the United States. The fall in oil prices could accelerate due to the expected slowdown in China's economy in 2018. Increasing production by such countries as Libya, Nigeria, Kazakhstan, Canada will expand the supply in oil market.

Along with this, against the background of further lowering of the discount rate by the Bank of Russia, it is expected that foreign investors will gradually exit from the financial market of the country. Thus, lowering rates and falling ruble will lead to the completion of carry-trade operations, which are a source of earnings for foreign investors. That is, for foreign investors, the period of income will end due to high rates and strengthening ruble. This will increase demand for currency.

Due to the unwillingness of the Russian authorities to carry out economic reforms a repeated decrease in oil prices could lead to a deepening of the financial crisis and recession in the economy. The process will continue in the coming years. So, in the next 5-8 years, a serious increase in oil prices not projected. Notably, in recent years an outflow of relatively wealthy and educated people from Russia to the West continues. This factor can further exacerbate the situation in Russia, which already faces demographic problems.

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