Difficult January for the Belarusian ruble

The national currency has come under growing pressure.

In January 2020, major traded on the Belarusian currency and stock exchange currency showed a moderate volatility and choppy, but overall, the ruble was under increasing pressure, although he managed confident enough to hold out this month, writes the Economic newspaper.

The total turnover for the three currencies equivalent to USD decreased by December 2019, and the monthly yield on ruble-denominated deposits slipped sharply compared to the actual effective (adjusted for the change in the rate of USD) profitability of foreign currency deposits. Just over a month on the stock exchange was 20 trading sessions.

The US dollar

The volume of transactions with US dollar in January 2020 made 283,7 mln. USD and decreased by almost 9% by the end of December.

Most of the month, the dollar changed in the range of 2.11–2,12 BYN (see figure). And if he started it a month at a minimum – 2,1098 BYN, then finished on the high, but not much higher – BYN 2,1380. Total for the month, the dollar gained 1.34 percent.

Last month, the volatility of the exchange rate of the dollar reached 1.5%. The maximum rate was reached January 31 – BYN 2,1380. Before that, most of the course of the month primarily increased from the minimum 2,1098 BYN 3 Jan.

Euro

The volume of transactions on the Euro in January 2020 amounted to EUR 169,2 million, up to December 2019, as many as 22.2 per cent.

Most of the month the Euro exchange rate changed in the range of 2.34–2.36 in BYN (see figure). And if he started the month close to the maximum 2,3542 BYN, and completed approximately at the same level – 2,3569 BYN. Total for the month, the Euro gained just 0.11 percent.

During the month the volatility of the exchange rate of the Euro reached 1,78%. The maximum level was reached on January 16 – 2,3692 BYN. Then just a week the rate fell to a low of 2,3339 BYN 24 January and recovered to the end of the month.

Russian ruble

The volume of transactions with the Russian ruble last month reached RUB 11.1 billion and decreased by 11.8% compared to the end of December 2019.

A large part of the month the RUB exchange rate changed in the range of 3.40 to 3.45 BYN for 100 RUB (see picture). And he, however, began almost a month at a minimum – 3,4012 BYN, and completed entirely on the lowest level of 3,3857 BYN. Total for the month the Russian ruble declined 0.46%.

In January 2020, the volatility of the exchange rate of RUB has risen to 2.6%. The maximum rate was reached January 13 – 3,4671 BYN. Then during the second half of the month the course was mainly down to low 3,3857 BYN January 31.

The turnover of the market of the three major currencies in equivalent USD (in terms of all currencies at the average monthly exchange rate of national Bank) in January reached approximately 644,79 billion USD. Gains momentum on the Euro only slightly more than half compensated for the decline in the dollar and the Russian ruble. Interesting and distribution of the shares of currencies in trading volume.

So, on average, in 2019 the share of the dollar took 50.4 percent of the annual volume, at Euro 29.5 per cent and the Russian ruble just 20.2 per cent. At the end of last January, the situation happened next: the dollar – 44%, Euro – by 29.1%, the Russian ruble is 26.9%. Here, the share of the ruble has improved markedly in comparison with average value, but this is too little to maintain a reasonable level of the Russian ruble in 50% in a basket of currencies.

By the way, if 01.01.2020 course BYN to a basket of currencies was 0,2739 BYN, then after a month he had gained only 0.15% to 0,2743 BYN. And to a large extent on such dynamics was caused by increase of the share of the appreciated “Russia”.

The yield of deposits in January, has not retained the favor of the ruble investors. So, if in the end of 2019, interest rates on ruble deposits up to 1 year averaged 8.7% per annum, then the currency for the same period – 0.35 percent. Over the year ruble deposits estimated at an average of 11.7% per annum, and foreign currency – 1.4%. The real yield on ruble deposits up to one year in equivalent currency, during the month reached 8,7% / 12 – 1,34% = -0,62%, more than a year -0,37%. The depreciation of the ruble 1.34% played against ruble-denominated investors in January. The monthly returns of foreign currency deposits year over year was up 0.03% and 0.12%, respectively.

January returned the balance of power in a more familiar direction, when any external voltage, which was a sharp decline in the profitability of ruble deposits at the moment.

The expectations courses in February

Given the expected continued pressure on oil prices, it is simultaneously under pressure will be the Russian ruble. The dollar on this background, by contrast, may strengthen and also strengthen the Euro, which will begin to affect the economic consequences of the withdrawal of Britain from the EU. In the internal market, the greatest pressure will provide continued uncertainty over oil supplies from Russia, as well as the need to boost Belarusian exports to Russia.

Thus, it is possible to expect growth of the dollar to 2.16–2.17 in, and even to 2.2 BYN, while the Euro is relatively stable at 2.35–2.37 and BYN, and the Russian ruble may continue to decline to 3.35 BYN, and then recover to 3.4 BYN.