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 a 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 by 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.
The second important factor is related to the repayment 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 lower 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 the Russian stock market 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.
We continue to publish currency exchange rate forecasts. This time we present the dollar exchange rate forecast for March 2017.
Dollar exchange rate in March 2017: influencing factors
Previously, the USD was completely dependent on the price of oil. When the cost of a barrel of oil began to decrease, the price of the dollar against the ruble went up. Now the financial market is restructuring to a new reality, which means a decrease in prices for “black gold” and, as a result, independence from it. It is this fact that is of primary importance for the Russian economy, and also affects the dollar-ruble ratio.
Currently, the cost of one barrel of oil has settled at 55 USD. This happened due to a decrease in the amount of extracted raw materials. The Russian Federation has cut production by 300,000 barrels.
At the same time, oil production from shale is increasing in the United States of America. According to analysts, in 2018 production will be the highest in the last 50 years.
The head of the Central Bank of Russia predicts a decrease in prices for “black gold”, which will lead to an increase in the USD exchange rate in 2017.
Foreign currency against the ruble in March 2017
As analysts predict, in the first spring month of 2017, the American currency will cost 61-65 rubles.
There are opinions that the currency will cost 58 domestic monetary units per USD.
The second scenario is realistic if the Russian Ministry of Finance continues ruble interventions (purchase and sale of domestic currency).
In general, according to forecasts for March 2017, we can conclude that the dollar exchange rate will be as follows:
- from March 1 - 65-67 RUB;
- from March 16 - 56-57 RUB.
The lowest rate during March is expected to be at 55.3 USD against the ruble.
Experts believe that this month you can start buying foreign currency. In the United States of America, there will be an increase in rates, which will lead to the stabilization of the American monetary unit in relation to other currencies.
Hello, dear blog subscribers, a fresh forecast of the dollar exchange rate for March 2017 has been compiled especially for you. Next, you will find out whether Russian citizens should buy the American dollar or not.
2016 turned out to be successful for the ruble, despite numerous negative forecasts from pseudo experts. The ruble turned out to be the highest-yielding currency.
What will happen to the ruble in 2017? Most experts assured that at the beginning of 2017 the ruble would become cheaper, but, on the contrary, in January and February it strengthened somewhat against the US dollar. Many dollar exchange rate forecasts for March 2017 are pessimistic. I suggest you first list the factors that may affect the ruble exchange rate in March.
What determines the dollar exchange rate forecast for March 2017?
The dollar forecast for March 2017 depends, first of all, on the price of black gold. The price of oil consolidated above the level of 55 as a result of a reduction in production volumes. OPEC countries agreed to reduce production by 1.02 million barrels per day. Russia has promised to cut production by 300,000 barrels. As a result of this agreement, the price of oil managed to rise significantly. In February 2017, OPEC countries started talking about a possible extension of the current agreement into the second half of the year. As we see, oil-producing countries want to increase the price of oil and are making certain efforts to achieve this.
It is worth noting right away that not everything is so rosy on the oil market. The fact is that rising oil prices are leading to a revival of shale oil production in America. At this time, shale oil production is only increasing, and it has grown by as much as 6 percent. Experts assure that the growth potential is 1 million barrels per day. Experts assure that in 2018 shale oil production will reach its maximum level.
Because of this, hoping that the cost of black gold will increase for a long time is at least stupid. In February, the head of the Central Bank said that there was no need to count on a further increase in the price of oil, and the price of $55 per barrel could be the maximum. Nabiullina does not rule out a possible reduction in the price of black gold by 30 percent, that is, up to $40 per barrel.
Experienced experts do not expect oil prices to rise in March. In addition, Trump’s statements regarding the need to develop shale oil production, as well as increase oil exports, suggest that in the spring of 2017 the price of Brent oil may fall.
The impact of sanctions on the ruble exchange rate forecast for March 2017
Expectations for improved relations between Russia and America led to a slight strengthening of the ruble this winter. However, as soon as Trump took office, it became clear that in order to lift the sanctions, he would have to overcome a lot of obstacles. Investors are convinced that relations between the United States and Russia depend not only on Trump.
How can this affect the ruble exchange rate? The fact is that they bought rubles relying on rumors, but they will sell them based on facts. If the sanctions are not lifted, this will negatively affect the value of the ruble against the dollar.
Russia's payment schedule for external debts also plays an important role. It is in March that Russia must pay about $15 million to America, which is 3 times more than the volume of payments in February. Such demand for the US currency could lead to a weakening of the ruble in March 2017. 
The influence of the Ministry of Finance and the Central Bank on the ruble exchange rate
On February 7, the Ministry of Finance began intensively buying foreign currency on the stock exchange in order to replenish the budget. The official volume of purchases is 6.3 billion rubles per day. 45% of rubles goes to the purchase of the American dollar, 45% to the purchase of European currency, and 10 to the pounds sterling.
The actions of the Ministry of Finance themselves cannot have a strong impact on the ruble exchange rate, but in combination with the high volumes of payments in March, the Russian ruble may significantly fall in value. The important level for the dollar/ruble pair is at 60, as soon as it is broken the price can quickly jump towards the breakout.
The Bank of Russia maintained the interest rate in February, however, next month it should decrease. This also negatively affects the value of the ruble. The regulator's meeting is scheduled for March 27, 2017.
When forecasting the ruble exchange rate, it is also worth taking into account Trump’s policies, as well as the dynamics of Fed rates in America. The dynamics of American policy are positive, which allows the rate to be increased several times in 2017. It is not yet known when the next rate increase will take place. The next meeting will be held on March 15, on this day the rate is unlikely to be changed, but at the meeting on May 3, the probability of a rate increase is 30 percent. 
Technical analysis of the dollar/ruble pair
As a result of technical analysis on the dollar/ruble pair, experts suggested that in March 2017 the dollar would fluctuate in the range of 58-63. The ruble is expected to depreciate slightly in March. There are no prerequisites for a sharp depreciation of the ruble yet, but the actions of the Ministry of Finance, the upcoming payments of external debt, as well as Trump’s decision to increase oil exports, create the preconditions for a slow depreciation of the ruble.
In March, the dollar may rise in price to 60. This value is an important resistance level. As soon as this level is broken, the price may rapidly jump towards the breakout.
So, based on everything said above, we can conclude that the forecast for the ruble exchange rate for March 2017 is not entirely favorable. Most experts expect a slight depreciation of the national currency in March.
Let me remind you that you shouldn’t trust experts’ forecasts one hundred percent, since many experts also predicted a depreciation of the ruble in the first months of 2017, but the ruble, in spite of everyone, turned around and rushed up.
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Anna Bodrova, senior analyst at Alpari:
Demand for Russian currency on the market remains high. This week, the ruble is consistently updating 18-month highs against the dollar, despite relatively stable oil and the strong position of the American currency on the international market.
It strengthens too quickly for this movement to be considered healthy and complete. Behind the ruble rally are clearly visible global interests, earnings, first of all. The chain looks quite simple: first, the Ministry of Finance announced the purchase of foreign currency in order to replenish the considerably thinner Reserve Fund, then the Central Bank quite clearly outlined its desire not to touch the level of the key rate for some time. Initially, it was assumed that the Russian rate would be lowered at the March meeting, but now it seems that the cost of lending within the Central Bank will not change for another two or three months.
All this together gave carry trade investors a clear signal about the safety of their behavior. And cash flows into ruble pairs increased. These are funds from hedge funds and institutional players, hence the corresponding volumes.
Quite a favorable arrangement: the rate within the country is fixed, imported dollars are converted into rubles, which gives a good profitability, but only if there is no stress. The Russian economic history of the last 25 years knows at least four similar cases, when the scheme worked for 12-25 months, and then its consequences hit the economy with renewed vigor.
However, carry trade is only one of the reasons for the ruble rally. The other lies in the large volumes of sales of export earnings at the end of January and serious tax volumes. In February, the situation will be completely opposite; here, traditionally, the volume of tax payments is the lowest for the year.
And ahead is March, when Russia will mark one of the peak periods for external debt payments in 2017. In the first month of spring alone, domestic companies and enterprises will have to repay about $12 billion in debt. This is almost the same as for June, July and part of August of last year combined. Debtors usually go to the market to get money. Naturally, not en masse and not in a crowd. Interest in the dollar against a similar background, coupled with a weak previous tax period and a protracted rally, may also work against the ruble.
No one can say for sure how long the ruble binge will last. The technical picture for the dollar is now as follows: the currency may retreat to the area of 55-56.5 rubles (with today’s sales volumes this will not take much time), and then, simultaneously with a change in the external background, the spring that was previously compressed to the limit will begin to straighten out. The reverse movement could be even larger than what is currently observed. However, its time frame is very vague: it could take a couple of weeks, or maybe several months.
The euro is entering a period of serious testing. Economic growth in Germany is slowing down, elections are approaching in France and the Netherlands. In these countries, according to preliminary data, the favorites of the race are Eurosceptics.
According to Alpari's estimates, Wednesday's trading will see the US currency around technical support at 57.1 rubles. This week for the dollar will end in the range of 56.75-58.85 rubles, for the euro currency - 60.55-63 rubles.
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. Such dynamics of the oil market became the main support factor for the 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, the ruble position will remain within the range of 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 decline in the value of the US currency. The dollar will be supported by a further increase in the Fed rate, which will increase the volume of investment 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. The funds received as a result of privatization at the end of last year will cover only part of the federal budget costs. 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.
Worsening 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.