Fresh dollar forecast for March 2019: table by day with rates down to kopecks, as well as analytics and main economic trends at the exchange rate at the beginning of spring. In Russia there is now a period of waiting for foreign exchange interventions, according to which the dollar exchange rate should increase slightly. The fact is that a strong ruble is unprofitable from the point of view of replenishing the Reserve Fund and the budget. If you strengthen it below 66, then the budget will not receive enough money, because the Russian economy is tied to the dollar price. Therefore, many experts are firmly convinced that the dollar forecast for the beginning of spring 2019 will imply either dancing at around 68-69 rubles, or a slight increase to 60 and above.
Some may find it paradoxical that oil is rising while the ruble is falling. But the mechanism here is something like this:
- The budget of the Russian Federation is in rubles;
- It includes a forecast of $60 per barrel;
- Oil rose to $66 a barrel;
- The dollar fell from 66 rubles to 68;
Through simple calculations we arrive at the following. The cost of a barrel, according to last year’s forecasts and the old exchange rate in rubles, is 3,300 rubles. According to the new scenario - 3248. Consequently, the budget receives a shortfall of about 2.6%.
In order for rates not to fall, the gap between the ruble and the cost of oil must be higher. If oil rises to $70-76 per barrel, then it will be possible to even slightly reduce the ruble exchange rate and level out rates. In the meantime, changes in hydrocarbon prices are weak, you will have to wait a long time for everything to level out, and even buy dollars so as not to lose the budget.
For every day
When compiling a daily forecast for the dollar in March 2019, the table in the right column contains indicative rates that take into account the likelihood of foreign exchange interventions.
|
Day |
Favorable rate |
During currency interventions |
When forecasting the USD for March 2019, the main economic trends show the absence of large jumps in the currency. Even with an unfavorable forecast, the dollar will grow by a maximum of 2-3 rubles. The matter is explained by greater stability in the oil market, the implementation of OPEC agreements by Iran, and the completion of elections in the United States.
Of course, fluctuations due to the changed political situation cannot be ruled out. But so far everything on the world stage is more or less stable. If there is no further aggravation in Ukraine, then there should not be a strong rise in the price of the dollar.
At the same time, it is impossible not to note in the forecasts the deteriorating situation in the rest of the economy, caused by an increase in the tax burden, sanctions, and inflation. Be that as it may, import substitution did not occur, new taxes and excise taxes were introduced, and the currency fell by 2 times in recent years. Where can the economy grow completely?
So there is no need to rush to get rid of dollars amid a short-term improvement in the ruble exchange rate. There are no bright prospects for the Russian economy yet, even against the backdrop of rising hydrocarbon prices.
This is the current dollar forecast for March 2019, which is very contradictory due to the meager information from the Central Bank.
12:15 — REGNUM In March, the dynamics of the exchange rate will change noticeably - the ruble will begin to fall, and we can expect a decrease to the level of 63-65 rubles per dollar. About this to the correspondent IA REGNUM On March 10, a leading financial analyst at Global Finance said: Pavel Berlinov.
Alexander Gorbarukov © REGNUM news agency
“March will be very different from previous months. I don’t expect the ruble to strengthen, but on the contrary, I expect it to fall to the area of 63-65 rubles per dollar,” Berlinov said.
The expert noted that the controversy surrounding the situation with the ruble has not subsided for a long time— in February, forecasts about the depreciation of the ruble did not come true.
“Before information appeared about the Ministry of Finance entering the market, the ruble was predicted to strengthen up to 55 per dollar. In February, after it became known that all excess profits from the sale of oil above $40 per barrel would be used to purchase foreign currency, there was talk of reducing the ruble to around 65 rubles per US dollar. But nothing happened, and our currency strengthened to 57 rubles per dollar,” the analyst states.
In his opinion, this result was associated “with the influx of foreign capital, carry traders and large volumes of foreign currency sales from our exporters.”
In March, however, several factors will play against the ruble, which will contribute to a decline in the exchange rate. First of all, this is a question of oil prices, Berlinov pointed out.
“For three months, quotes were in the range of 54-57 dollars per barrel. But as shale production revived in the States, confidence in a breakthrough of the lower limit only grew. And on March 8, the speculators lost their nerve,” the expert explained.
“For the 9th week now, the US Department of Energy has been telling us about a record increase in oil reserves and an increase in production. Already, America is producing 9.088 million barrels per day. And the ever-increasing number of drilling rigs tells us that this growth will continue. I expect a further decline in oil prices, the nearest target is $49,” the financial analyst predicts.
Second important factor is associated with the payment of debts on external loans - in March their volume will amount to $11.8 billion, he continued.
“This is six times more than in February. Rosneft must pay almost $4 billion for the purchase of an oil refinery in India. The Ministry of Finance will buy almost 2 billion. About $17 billion should leave the country in March, and the inflow will not exceed 10 billion. The lack of dollar liquidity will cause the American dollar to strengthen against the ruble,” Berlinov said.
The third circumstance is related to the monetary policy of central banks, the expert emphasized. “The Federal Reserve will meet on March 15. The market already expects a rate increase in the States with an 86% probability. And on March 24, the Bank of Russia will announce its decision on the interest rate,” he recalled.
Taking into account the decline in inflation to 4.6% in annual terms, the regulator may well agree to reduce the key rate, admits a leading financial analyst at Global Finance. “A decrease in the difference between US and Russian rates may lead to an outflow of carry traders, which will negatively affect the exchange rate of our currency,” he believes.
Finally, geopolitical factors will also play a serious role, Berlinov is sure.
“With Mr. Trump coming to power, many have started talking about warming relations between Russia and America and the imminent lifting of sanctions. But the fairy tale has not come true, and no immediate changes are expected. Russia continues to be blamed for cyber attacks in the United States and Europe. America demands the return of Crimea to Ukraine and compliance with the Minsk agreements. In such tense realities, the investment attractiveness of our country is decreasing. And this will become another factor provoking the outflow of foreign capital,” the analyst concluded.
Let us recall that Russian market shares ended trading on March 9 with a strong fall in the wake of the collapse in oil prices, which began on March 8. Investors are actively dumping shares of commodity companies: the leaders among the securities that fell in price at the end of trading were shares of companies in the energy (-7.35%), telecommunications (-3.77%) and financial (-3.00%) sectors.
The domestic currency was able to strengthen its position in 2016. The strengthening of the ruble is caused by the rise in oil prices, which is associated with the stabilization of oil production. In the near future, the dollar exchange rate will remain stable, suggests the optimistic forecast of experts for March 2017. However, the ruble's position remains vulnerable to new external challenges.
Strengthening positions
During 2016, the cost of a barrel increased from 27 to 55 dollars. Similar dynamics oil market has become the main support factor for Russian currency. Further price trends in the “black gold” market will depend on the readiness of oil-producing countries to adhere to the agreements reached.
For the first time since 2008, OPEC countries were able to agree on terms for reducing oil production. This measure is aimed at restoring the price of oil, which will solve most of the budgetary problems of oil exporters. As a result, the cost of a barrel in 2017 will be fixed at $55-60. However, analysts note risks that could undermine the achieved balance.
Despite the expected reduction in crude oil production, Libya continues to increase oil production. The exporter intends to restore the previous volumes of supplies of “black gold”, which collapsed as a result of the protracted internal conflict. According to experts, a further increase in Libyan oil supplies could undermine the agreements reached.
In addition, prices rose to 54-57 dollars per barrel. will affect the increase in shale oil production in the United States. Expanding American oil exports will reduce the effect of supply cuts by OPEC countries. As a result, price stability will be at risk.
Analysts are considering two possible scenarios for changes in the dollar exchange rate in the near future. Maintaining oil prices above $55/barrel. will allow the ruble to maintain its achieved positions. The negative scenario assumes another decline in the price of oil and a subsequent strengthening of the dollar’s position.
March forecasts
Forex Club Group analyst Irina Rogova notes the decisive influence of oil prices on foreign exchange market trends. If market participants adhere to the agreements reached, the cost of a barrel will remain within $54-57. In such conditions, ruble positions will remain within 58-60 rubles/dollar.
Failure of agreements and the resumption of oil production growth will result in a decrease in the cost of “black gold” to $48-50 per barrel. As a result, dollar quotes will return to the range of 63-65 rubles/dollar.
In addition to the oil market, further changes in the dollar exchange rate will depend on the future policies of Donald Trump. The new US President will be inaugurated in January, after which the dollar's position may come under pressure. The expected launch of tax reform and changes in the terms of foreign trade agreements will affect the decrease in the value of the American currency. The dollar will be supported by a further increase in the Fed rate, which will increase the volume of investments in American assets.
In turn, IMEMO RAS representative Yakov Mirkin admits a new period of devaluation of the Russian currency. The actions of speculators who make short-term investments in Russian assets could undermine the stability of the ruble. Deterioration in the dynamics of the oil market will lead to a sharp outflow of resources, which will affect the weakening of the ruble. Similar trends led to the rapid devaluation of the ruble in 2008 and 2014, the expert notes.
As a result, a new external shock could provoke a weakening of the ruble to 71-74 rubles/dollar. In addition to lower oil prices, instability in the foreign exchange market may be caused by rising geopolitical tensions. Donald Trump's future policies remain unpredictable. At the same time, the development of the conflict in Syria and the failure to resolve the Ukrainian crisis may lead to the expansion of sanctions.
An additional factor that could lead to another increase in the dollar exchange rate is problems with filling the budget. Reserve Fund reserves are declining at a rapid pace. Funds received as a result of privatization at the end of last year will cover only part of the costs federal budget. As a result, officials will look for alternative sources of revenue. In particular, the government may agree to a moderate devaluation of the ruble, which will fill the budget with share premiums.
In March 2017, the dollar exchange rate will remain stable, which is reflected in the optimistic forecast of analysts. The cost of a barrel above 55 dollars will lead to stabilization of quotations at the level of 58-60 rubles/dollar.
Deterioration external factors will lead to a weakening of the ruble. Depending on fluctuations in prices for “black gold”, the dollar exchange rate can reach 63-74 rubles/dollar.
Contrary to the pessimistic forecasts of analysts, the ruble grew by 20% against the dollar in 2016 and continued to strengthen in January 2017. This is both good - prices in stores remained at the same levels, and bad - a “strong” ruble is not profitable for domestic exporters. The Ministry of Finance, based on the fact that it is exporters who fill the budget, decided to reduce the value of the ruble. What forecast of the dollar exchange rate for March 2017 does the department consider optimal and why is the Ministry of Finance going against the market?
Exchange rate forecast from Ministry of Finance analysts
At the end of January 2017, the Ministry of Finance of the Russian Federation decided to intervene in the foreign exchange market in order to reduce the value of the ruble, justifying it as follows:
- The current price of oil, combined with the strengthening of the ruble, will have a bad impact on government budget revenues, since most of it is based on sales of oil and gas abroad.
- The devaluation of the Russian currency is disadvantageous for exporters, since it reduces their competitiveness by international market.
- The need to replenish foreign exchange reserves.
The department believes that the optimal dollar exchange rate in Russia with an oil price of 55 dollars per barrel is in the region of 65-67 rubles. At the same time, according to forecasts of experts from the Ministry of Finance, these levels can be achieved if the ruble is sold below it market value for one month, i.e. from February to March 2017. Based on this, we can conclude that from March 1, the Ministry of Finance will either stop interventions if the dollar costs 65 rubles, or will continue to buy foreign currency until it reaches the desired rate.
Revenue part of the federal budget
| Year | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Income, total | 8 305,40 | 11 367,70 | 12 855,50 | 13 019,90 | 14 496,90 | 13 659,20 |
| Oil and gas revenues | 3 830,70 | 5 641,80 | 6 453,20 | 6 534,00 | 7 433,80 | 5 862,70 |
| Ratio in % | 46,12 | 49,63 | 50,20 | 50,18 | 51,28 | 42,92 |
Latest oil market news
Since the Ministry of Finance links its actions to the price of oil, to forecast the dollar exchange rate for March 2017, it is important to find out what experts say about its price this month.
Taken together, all this news suggests that the cost of “black gold” in the near future will either remain at current levels or begin to gradually increase. The latter option, according to analysts, is more likely.
How much will the dollar cost in Russia from March 1: 2 basic expert forecasts
All analysts’ forecasts regarding the value of the dollar in March 2017 can be divided into two camps: those who say that it will fall below 58 rubles and consolidate at this level and those who predict that it will fall below 57 rubles. At the same time, both groups note the presence of a downward trend and point to the untimeliness of the Ministry of Finance’s decision on ruble interventions. Because now he will play against the market and will not be able to reverse its dynamics until the intended goals are achieved.
Analysts also note that this decision is essentially correct and will be easy to implement if you wait a couple of months until the ruble exhausts its downward momentum. This, according to experts, will happen in the middle or end of March 2017. Until this point, ruble interventions will be a waste of money.
Resume
To summarize, it can be noted that the dollar exchange rate forecast for March 2017 depends on who wins - the Ministry of Finance or the downward trend. In the first case, from March 1, the rate will fluctuate around 65-67 rubles. In the second, the dollar will first drop to 56-57 rubles (mid-March) and only then begin to rise to levels acceptable to the Ministry of Finance.
