Dollar Swerving In Belarus

16.12.2024, 12:17
20,118

The rate may return to 3.50.

Last week, the exchange rate of the Belarusian ruble was again drastically changed. On the first day of the week, December 9, the U.S. dollar depreciated by -0.85% to USD/BYN 3.3775. Then it sharply turned upward and by Thursday, December 12, rose to USD/BYN 3.4850, adding +2.80%. The week closed with USD/BYN 3.4755. What to expect from the currency market in mid-December? This is what myfin.by reports about.

Exchange Rate Swerve

The total change in the exchange rate for the week was +2.03%, +9.38% since the beginning of this year. The trading volume of dollars for the week remained in the average range of $67.495 million.

At the same time, the exchange rate of the Russian ruble was changing in the same trend, only with the opposite sign - from the maximum of the week on Monday, December 9, to the minimum on Thursday, December 12. From RUB/BYN 3.4156 per 100 Russian roubles to 3.3486. The week ended at RUB/BYN 3.3558 per 100 Russian rubles. The total change in the exchange rate for the week amounted to -1.20%. Since the beginning of this year, the exchange rate of the Russian ruble in the Belarusian currency market has already decreased by -4.10%. The trading volume for the week was above average and a total of Br25.808.860 million of Russian rubles was traded. This amounts to about $256 million.

Such sharp changes in the exchange rate have always posed a problem for the foreign exchange market, as they complicate medium- and long-term planning and increase the cost of currency hedging. High volatility is imported to the Belarusian market from the Russian market, where volatility is driven by the uncertainty of external restrictions.

The Russian ruble is still under pressure from the foreign currency shortage provoked by the restrictions on Russian banks that provide processing of export revenues. As long as this problem persists, high volatility will be present on the currency market. However, there is an opinion that within one or two weeks, exceptions may be introduced with regard to the Russian Gazprombank (full-fledged sanctions against it come into force on December 20), however, it is just at the level of speculation.

Thus, the dollar exchange rate on the Russian market is very likely to remain above 100 rubles in the range USD/RUB 104.0 - 108.0. This is indirectly indicated by a -4.0% YoY decline in exports of goods in November and a decline in the current account balance from $4.7bn in October to $3.2bn in November. The lower revenue means more expensive dollars on the market, it's all trivial.

Two Major Events of the Coming Week

Two meetings of central authorities - the US Federal Reserve on Wednesday, December 18, and the Bank of Russia on Friday, December 20 - may become an undoubted hit during the week. There are expectations that the Fed may take the next step of lowering the interest rate by -0.25%. The basis for such a decision may be the latest labour market statistics in the States at the beginning of the month. In case of a rate cut, the EUR/USD currency pair has a chance to fall to 1.045.

At the end of the week, after the closing of the Belarusian market at 15:00 Moscow time, the decision of the Board of Directors of the Central Bank of Russia on the key rate will be published. The forecast is for a rate hike of 2.00%, but it is unlikely that it will lead to a significant strengthening of the Russian ruble. Still, the balance of supply and demand is not in favour of the latter.

Given the above, we can expect further weakening of the Belarusian currency in the domestic market against the U.S. dollar and strengthening against the Russian ruble. It is possible that the USD/BYN pair will return above 3.50, while the Russian ruble will decline to RUB/BYN 3.32 per 100 Russian rubles.

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Dollar Swerving In Belarus

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