Tut.by: What will be the value of dollar at the end of 2014? Eight experts staked on the question.

 

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In the second half of 2013 Belarusian ruble entered the turbulence. The Belarusian government forecasts that in 2014 the situation will flatten out. However experts foresee that Belarusian ruble will go on devaluating smoothly. Thus if the country leaders don’t take control of internal economic imbalances and external shocks, the ruble can go to a steep dive.
It is worth recalling that the National Bank projects for 2014 an average annual dollar rate of 9800 rubles. At the same time the lead bank of the country predicts 1-3% decrease in a real effective exchange rate of Belarusian ruble and, according to regulator estimates, it will promote price competitiveness of Belarusian goods in foreign markets.

It should be noted that starting from June the last six months in Belarus have been characterized by smooth depreciation of the Belarusian ruble exchange rate to dollar. During this period the monthly growth of dollar averaged 100 rubles per month. Thus by the end of 2013 the official dollar exchange rate reached 9250 rubles.

And what do experts think on the subject? What dollar rate will be established at the end of 2014?

Katerina Bornukova, the expert of the Belarusian economic research and educational center BEROC

10 500

- At the moment Belarus goes through gradual ruble devaluation and to my mind this process will continue as well in the first half of 2014. The money appropriated by Russia and the revenue from possible privatization will rescue us from going through the events of 2011 one more time, but they will neither empty enterprises’ warehouses, nor solve the problems with trade balance. It would be more rational to use them for modernization rather than spending to support the exchange rate. Especially when smooth devaluation makes it possible to keep inflation in check. By the end of 2014 the exchange rate is likely to stabilize as there will be presidential elections near at hand. That’s why it is especially important to carry out sufficient devaluation beforehand.

Andrey Omelkovich, regional director of TeleTrade in Belarus

10 300

- It’s not worth expecting either significant upturn or downturn at Belarusian currency market. There will be the same risks for the ruble in 2014 as they were in 2013. Until recently a tangible pressure on ruble could be exerted by the sum of external debt financing which will make 3,2 billion dollars in coming year. Now it strangles the positions of the ruble less due to the agreement with Russia, according to which it allocates 2 billion dollar loan. In 2014 Belarus also expects the last loan tranche from EURASEC Anti-crisis fund. It should not be overlooked that in the second part of the current year ruble lost certain part of its value, which means that the next year expectations are partially included in the current value which is 9500 rubles per dollar. Providing there are some steps towards privatization we’ll see an additional confirmation that ruble will value over the range 9 800-10 300. This corridor in its turn will make a good effect on Belarusian exporters, which makes one of the most significant tasks for economic leaders of the country. The way it happened 2013, the situation in the currency market in 2014 will depend on currency inflow to the country. The policy of the National bank of Belarus aimed at smooth currency rate decrease is most likely to continue so as to improve the economy that will have an effect on the value of dollar. My prediction is 10 300 rubles by the end of 2014.

Elena Belan, leading economist in the investment company Dragon Capital (Ukraine)

10 500

- Situation in the external sector remains difficult. Decrease in potassium fertilizer external demand and export shortfall against the proceeding growth of consumer and investment import contributed to increase in foreign trade deficiency in 2013. At the same time fast decrease in the rates of interest in the first half of last year provoked the conversion of ruble deposits in currency and, naturally, increase of demand for foreign currency cash by the population.

Due to the gradual weakening of ruble exchange rate in the second half of the year it became possible to restore price competitiveness of Belarusian export in Russian market. But Russian economy shifts into low and it will negatively affect the demand for Belarusian products. Besides the prospects to restore Belarusian-Russian potassium cartel as well as the perspectives of world prices for potassium are still ambiguous. Taking this into account we expect devaluation pressure on Belarusian ruble to remain in 2014 too. The policy of the National bank is likely to be aimed at smoothing excessive fluctuations of the exchange rate.

Positive news is that the government successfully copes with refinancing of peak payments on currency debts. Recently announced 2 billion dollars of loanable funds from Russia will exceed a considerable part of currency payments of the government planned for 2014. Besides the sale of state shares of large enterprises, in particular MTS and Mozyrsky oil refinery plant, can also bring about 1,5 billion dollars of currency receipts. It will provide essential support for reserves of the central bank and will allow at least to hold them from further decrease.


Vladimir Artugin, editor-in-chief of the magazine “Currency control and foreign economic activities”

10 700

- First of all I want to note that it will be impossible to hold an average annual exchange rate of 9800 rubles and not least because in this case warehouse stocks will keep on growing. As for more precise predictions for the exchange rate in 2014, over several years it has not depended much on the Belarusian government (that refuses structural reforms point-blank) but on the Russian leadership (to be more precise, on the volume of their support).

In 2014 the terms of the declared 2 billion dollar loan will become a crucial factor. If the credit terms imply signing the documents on the Eurasian economic union, at the end of 2014 the exchange rate will make 10 500 – 11 000. If they require international projects (establishment of joint companies) Belarus will drag out their realization and in turn Russia will drag out granting the loan. In such conditions devaluation of ruble will be inevitable, and what is more it will happen no longer than the first half of 2014. In this case by the end of 2014 dollar exchange rate will have made 13 000 – 14 000 rubles.

At the moment we lack information to understand what terms of credit allocation are. All we can say now is that the solution was carried out by Putin himself at the very last moment after the meeting with Lukashenko at the last conference of the Highest State Council of the Union State of Belarus and Russia in December, 24-25. The Russian government was presented with a fait accompli therefore it couldn't report about the sources of this money. Transfer of 400-500 million dollars either until the end of 2013, or in January, 2014 will confirm the first option. If Belarus doesn't get the money, the situation will move according to the second scenario.

There can’t be any intermediate option in Belarus – everything either is good, or bad. The reason for it is that extreme variants DO NOT DEPEND on the officials while the intermediate options DEMAND that they make some decisions. But no one wants making them. That’s why the situation will develop by the first option, which means 10 700 by the end of 2014. Russia tries on an integrator toga – it isn’t interested in uncontrollable crises! But the assistance to Belarus will be strictly dosed, so as to leave in a pre-crisis state.


Oleg Andreev, managing director of investment banking department in EnterInvest company

10 300

- In terms of the situation existing at the end of 2013 in Belarusian economy and economy of the main trade partner countries of Belarus, it should be noted that continuation of Belarusian ruble smooth devaluation is appropriate.

According to the results of 2013 nominal weakening of Belarusian ruble exchange rate to dollar exceeded 10% while the average annual rate decreased only by 6,8%. This depreciation didn't make a decisive impact on improvement of export opportunities for Belarusian economy.

In accordance with the plans of the government and the National bank in 2014 the average annual Belarusian ruble exchange rate in relation to dollar must make 9800. It assumes that by the end of 2014 one dollar will cost about 10 100 rubles. The average annual rate thus will decrease practically by 11% in comparison with 2013. This forecast can be considered moderately optimistic. It is most probably that in 2014 world economy will be restored not at such a fast rate as it was planned earlier. It also concerns the economy of Russia which is the main trade partner of Belarus. Considerable payments on external loans which Belarus is to pay in 2014 must be also referred to negative factors.

At the same time taking into account arrangements on the volume of oil delivery in 2014 and the decision about allocation of 2 billion dollar additional financial support, we can talk about a predictable change of Belarusian ruble exchange rate in 2014 and see that there are no risks to go over an uncontrollable situation of 2011. In 2015 the country will enter a new political cycle that also will have a certain impact on the economic situation.

Thus, devaluation at the level of 10-11% is expedient and achievable. By the end of 2014 Belarusian ruble exchange rate will be about 10 100 - 10 500 for one US dollar. My forecast is 10 300.

Vadim Iosub, analyst of an official Alpari partner in Minsk

11 000

- The forecast is based on the fact that next year foreign currencies value will grow in proportion to inflation rate, and the realistic scenario for the latter is 15% (instead of 11% as the government hopes).

It would be possible to make a typical reservation that the value of the currency basket will grow by 15%, and the dollar rate will depend on mutual fluctuations of dollar, euro and Russian ruble in the world markets. However the reality is that it is dollar rate that is targeted by the National bank, but not a vague currency basket which is unclear for broad masses; therefore we can expect that it US dollar exchange rate that will correlate with inflation as much as possible.

Currency rate lag from inflation will mean that real ruble exchange rate is strengthening and will negatively affect trade balance which now is not in its good form. Devaluation of national currency by rates exceeding inflation rate would do well for the economy, but the government will try to avoid it as an unpopular step.


Yarislav Romanchuk, managing director of the analytical center “Strategy”

13 990

- In comparison with the FIFA World Cup in Brazil, in guessing game about the rate Br/$ in Belarus there is more guessing than forecasting. In 2014 this ratio for our country in a greater degree will depend on political and psychological factors rather than on purely political and economic. Presidential election of 2015 will also have impact on the rate Br/ $. In 2014 the authorities will try to defuse a problem as far as it is possible, so that to demonstrate stability at least 9 months before the Election Day. Therefore taking into consideration deficiency of currency, investment hunger, devaluation of Russian ruble and soft monetary policy of National Bank under pressure of an industrial and agrarian lobby I think that in December 31, 2014 the dollar rate will make 13 990 rubles. It means that the future will hold devaluation approximately of 47%. But I repeat once again, there is as much science in this forecast, as in the assumption that Uruguay will become the world football champion.

Andrey Zhishkevich, chairman of the board of MTBank

10 925

- Following the results of 2013 I can evaluate that inflation will make about 15% (the fact over 11 months is 13,8%). Devaluation of Belarusian ruble in relation to dollar per year reached 11%, in relation to the currency basket - 10%, and in relation to Russian ruble as the currency of the main foreign trade partner - only 3%. In other words, Belarusian ruble in real terms became even stronger in some percentage points (even taking into account an internal inflation in Russia). It means that devaluation in 2014 can be expected at inflation rate plus a few of these very percentage points (to compensate the strengthening occurred).

In turn provided that National bank may go on with the tough credit policy, natural pressure upon current inflationary processes of the economy (which usually itself forces producers to reduce prices) it will hardly be surprise to see unambiguous (up to 10%) inflation rate according to the results of the next year. Thus, my forecast is the following: an exchange rate for the beginning of the year will be 9500 plus 10% (inflation) plus 5% (real weakening of ruble). Total is 10 925.

P.S. In all fairness if the National Bank had been carrying out smooth devaluation of ruble to the rate of inflation starting not from the middle of 2013 but from its very beginning (even despite the fact that in the first half of the year the economic situation of the currency market was reverse), there may have been fewer single splashes of devaluation expectations during the year