The Fall of Ruble is Inevitable: Better to Keep Savings in AMD
The rate of ruble continues to fall. The value of the Russian currency against the dollar has risen to 65.50. Although it is conditioned by the stagnation of the Russian economy, the inflation of the Russian ruble is an alarm both for the Russian business entities and the countries directly or indirectly connected to the Russian economy such as Armenia.
Let’s first of all try to reveal the causes of such kind of inflation. The causes can be categorized in two groups external and internal.
When the rate of national currency continues to fall along with negative predictions, one can assume that the internal mechanisms for the given economy have been wrong and resulted in the so called “economic bubbles.”
The Russian economy today is in a condition when internal economic protective measures are necessary to save the economy of the country. Those measures are state guarantees for national currency and the use of the reserve funds as a “lifebelt.” In the essence those are cause and effect processes. According to Russian sources country has no reserves to keep the national currency stable. The existing funds will probably be used when the fall relatively stops to try to keep currency inflation predictable.
What refers to external factors then it won’t be rude to say that the Russian economy is today in unique isolation. If we try to present the situation on the practical ground then we are to speak of the situation when no international product enter Russian market as a result of which the demand for ruble circulation sharply falls, while the circulation continues. In the Russian market today supply of ruble exceeds demand as long as there is no demand for purchase of foreign currency by ruble. Consequently the extra supply results in the fall of prices. On the other hand, in the presence of the external factors the speculations in the market also affect the rate of ruble which is the most vulnerable to any type of change.
In reality among Russian experts there is often expressed opinion that the fall of the ruble rate and the yuan is interconnected. This kind of connection at present can be viewed to the extent the currencies of the two trading partner countries can be interlinked. This means that it is a result of coincidence.
It is another question how will the fall of the Chinese yuan or any other change in the Chinese economy affect Russian economy taking into consideration the fact that China is the largest export market for Russia. This is the issue which is still early to discuss as long as the negative effects of the Chinese economy on Russian marker are still in the initial stage.
Coming back to the causes of the present rate for ruble, we cannot circumspect negative predictions. It is not a secret that the Russian market directly depends on the world oil prices. It is not a secret either that the prices of oil have been continuing to fall for several months. Consequently, all the predictions that the black gold will no more have its previous value seem to be quite real.
It the context the factor of Iran should not be ignored either. Rich with oil resources Iran which will soon enter the international market is to cause the new strong wave of falling oil prices. According to approximate calculations this will happen in autumn which should become another alarm for those who deal with ruble.
Of course all this will also affect the Armenian market. The fall of the ruble rate affects a large segment of the Armenian population. The devaluation of the transfers coming from Russia is directly proportional to the level of well being and the indicator of the economic activity in the country. Naturally the negative impact will be short lived for business entities. In the long-term perspective even if ruble rate get even lower but become stable, it will be possible to gain benefits by raising the value of the national currency.
However, for the present everyone is better to keep savings in AM drams, as long as ruble is still to continue falling for a long time.
- Russian Parliament Backs Changes In Constitution Constitutional changes allowing Vladimir Putin to run for president again in 2024 sailed through Russia’s lower house of parliament on Wednesday, opening the way for him to potentially stay in power...
- Russian Government Resigns President Vladimir Putin thanked Dmitry Medvedev’s government for its work.
- Former Moscow Mayor Yury Luzhkov Dies Yury Luzhkov, the former mayor of Moscow, has died Tuesday at age 83, a source close to him told Interfax.
- House Majority Leader Hoyer Statement on Protests in Moscow I call on the Russian authorities to release political prisoners.
- Trump Says He will Meet Russia’s Putin at G-20 Summit Next Week In an interview on Fox News, Trump said he would hold meetings with Putin and Chinese President Xi Jinping. Trump confirmed earlier this week he would be meeting with Xi.
- The End of Armenia's Investment Attractiveness It’s no secret that the investment attractiveness of our country has been problematic for many years both for subjective and objective reasons, including the "no war, no peace" situation in which we...
- Embargo on Imports of Turkish Goods: Policy Uncertainty The Armenian government still remains undecided about restrictions on imports of Turkish goods.
- Armenian State Commission for Economic Competition Protection and Russian Federal Antimonopoly Service Sign MoU The State Commission for the Protection of Economic Competition of Armenia and the Federal Antimonopoly Service of the Russian Federation signed a Memorandum of Mutual Understanding in the competition...
- Armenia Central Bank Keeps Refinancing Rate Unchanged The rate of funds attracted from banks by the CBA is 4%.
- Armenian Cenbank Changes 2020 Recession Projection From 7,2% to 7,8% He said they would present the 2021 projections later.
The Right of the People of Artsakh to Self-Determination Cannot Be Suspended Through the Use of Force: Pashinyan
Parliament Adopted Legislation on Community Enlargement
Investment Program of Construction of Sisian-Kajaran Road Section of North-South Road Corridor To Be Launched
Minister of Foreign Affairs of Armenia Met with the Minister of Foreign Affairs of Iran
5-Day Weather Forecast in Armenia
Artsakh to Hold Moment of Silence on Sep 27 in Memory of 2020 War Victims
Armenia Security Council Chief: We Need to Normalize Relations with Turkey
Armenia Records 256554 Confirmed Coronavirus Cases
Russia, France Express Readiness to Continue Work Towards Stabilizing Nagorno Karabakh Situation
Seerpoohi Elias: Armenian Woman and the First Chief Justice of New Zealand
We're Receiving Positive Signals from Pashinyan, Erdogan Says
Pashinyan-Erdogan Meeting Is Not Planned: Armenia's Deputy Prime Minister
Armenia's Speaker of Parliament to Pay Official Visit to Russia
Irakli Garibashvili Sends Congratulatory Message to Nikol Pashinyan on Indpendence Day
5-Day Weather Forecast in Armenia
Aurora to Honor the Spirit of Humanity in Venice
Secretary General of La Francophonie Sends Congratulatory Message to Prime Minister of Armenia on Independence Day
Tehran To Host Iran-Azerbaijan-Turkey Foreign Ministerial Meeting
Minister of Foreign Affairs of Armenia Ararat Mirzoyan Met with Minister of Foreign Affairs Jean-Yves Le Drian
Armenia Records 255648 Confirmed Coronavirus Cases
Sir Khachik Paul Chater, Father of Hong Kong
Trump Says He’d Beat Biden in a Boxing Match
Lebanese-Armenian George Bojkian Appointed Minister in the New Lebanese Government
Arayik Harutyunyan Convened an Enlarged Working Consultation
5 Day Weather Forecast in Armenia
Construction of Nord Stream 2 Completed: Gazprom
Zelensky's Speculations about Risk of Russia-Ukraine War Apocalyptic: Kremlin Spokesman
Commander of Artsakh Defense Army Mikayel Arzumanyan Relieved of Duties
Armenia Records 248397 Confirmed Coronavirus Cases
US Envoy to Armenia Says they do not Consider Karabakh Conflict to be Resolved