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ruble, but there are other, more important influences. They include the reduction of Russia's current account balance of payments and external geopolitical risks, including the constant threat of new sanctions.
Andrey Kochetkov, an analyst at Otkritie Broker, says that the ruble is one of the most undervalued currencies in the world, and it is not because of the high price of oil, but because of strong fundamentals. Russia has a trade surplus, a current account surplus and a very small external debt.
"We are used to oil costing 3,000-3,500 rubles per barrel. In the last few years, however, the ruble exchange rate has ceased to correlate with the price of oil. The budget rule is partly to blame for this. In fact, the high price of oil began to have a negative impact on the ruble exchange rate. The higher the oil prices, the more funds are spent by the Ministry of Finance for purchasing foreign currency, which puts pressure on the ruble," says Kochetkov.
According to the data of the end of October 2021, despite the implementation of the budget rule, the correlation between the dynamics of the black gold and the ruble reached a record value since the second half of 2020 at 50%. Vladimir Bragin, head of research at Alfa Capital Asset Management, predicts that the ruble exchange rate will continue to be influenced by oil price movements in 2022, in addition to the fundamental factors. In addition, it will be affected by sanctions and geopolitical risks.
Bragin concluded that it is fundamentally unimportant for the ruble whether oil will cost $60 or $100 per barrel in 2022. According to him, the only difference will be the speed of accumulation of foreign exchange reserves. That's why, the analyst added, if we take the oil price as related to the ruble, we will do it only as an indicator of the general situation in the economy and the markets.
55 RUSSIA Country Report February 2022 www.intellinews.com