How the Fed rate will affect the ruble until the end of the year. The US Federal Reserve raised its base rate. Impact on the ruble exchange rate Increase in the Federal Reserve rate for the ruble

On December 16, 2015, the US Federal Reserve raised key rate by 0.25%. This caused considerable resonance in the global economic community - after all, last time the rate was changed in mid-2006. What is the need for such changes, and what can they lead to?

What is the base interest (key) rate?

This indicator represents the percentage at which banking organizations borrow cash from the Central Bank of the country (in America its functions are performed by the Federal Reserve). The interest rate at which banks issue loans to ordinary citizens cannot be lower than the established key rate - otherwise credit institutions will begin to operate at a loss. The 2008 financial crisis, which began in America and gradually spread throughout the world, forced the American authorities to take an unprecedented step and reduce the key rate to a record low level, varying in the range from 0 to 0.25%.

The temporary measure aimed at stimulating the economy and getting out of the current difficult financial situation dragged on, and the base interest rate was changed upward only in mid-December 2015.

How will a change in the Fed key rate affect the dollar exchange rate?

According to analysts, changes in interest rates will have a significant impact on the dollar exchange rate against the ruble (). Thus, the rating agency Moody’s prepared a report indicating a significant vulnerability Russian economy to changes in internal financial policy States. The same opinion is shared by I. Didenko, who is a member international union economists. According to him, raising the key rate will lead to a strengthening of the dollar and, as a result, a depreciation of the ruble.

Russian analysts, who are government officials, are much more optimistic. Deputy Chairman of the Central Bank of the Russian Federation S. Shvetsov announced the likely strengthening of the ruble and a depreciation of the dollar.

E. Nabiullina, who holds the post of head of the Central Bank, noted that the ratio of the ruble and the dollar is influenced by a combination of many factors, including oil prices, the foreign policy situation in the world, the economic interaction of Russia with partner countries, so a change in the key rate will not have a significant impact influence on the value of the dollar.

The head of the Ministry of Economic Development A. Ulyukaev said that the decision made by the Fed did not come as a surprise to anyone, and the expected increase in the key rate was taken into account when concluding contracts for oil supplies.

A change in the US Federal Reserve key rate by 0.25 points increased the value of the American currency on the world market. However, the rather insignificant size of this indicator allows us to conclude that there will be no radical jumps in the exchange rate - for example, since the decision was made to increase the rate, the dollar exchange rate relative to the ruble has increased by no more than a ruble. Oil prices have a much greater impact on the ruble exchange rate ().

This will drop the "wooden" to 70 per dollar

The US Federal Reserve decided to raise the base interest rate by 0.25 percentage points. Now interest in the dollar as an investment instrument will increase and investors will begin to use it more actively, transferring funds from other sectors. For oil, this is another reason for the price to fall - if the Fed continues the same course regarding the rate, then the barrel risks falling to $45. Which, in turn, will negatively affect the Russian currency, which in the medium term will fall in price to 67-70 rubles per dollar.

A week before the Fed meeting, almost all experts unanimously said that the agency’s board of directors would make just such a decision. Moreover, the head of the American regulator, Janet Yellen, had previously announced a similar decision, citing the positive dynamics of the main US macroeconomic indicators.

According to the President of the Moscow International Monetary Association, Alexei Mamontov, the consequence of raising the Fed rate will be an increase in investments in American assets, which will hit the financial situation of most developing countries.

First of all, oil-producing states, whose economies are heavily dependent on income from the export of raw materials, will suffer. Market players are reorienting their investments from the mining sector in favor of dollars. Stock speculators will add fuel to the fire by concluding short-term contracts for the purchase and sale of hydrocarbons in the hope of winning back the last positions gained by oil. “Prices for “black gold” will inevitably slide down and in the near future will find themselves below the psychological mark of $50 per barrel,” Alexey Mamontov is sure.

This is not the last factor that can drop oil prices. According to scientific supervisor Institute of Economics of the Russian Academy of Sciences Ruslan Grinberg, we must not forget that Janet Yellen’s department is making its decision in conditions when the oil market is already in a very unfavorable situation. IN currently There are all the preconditions that the solidarity of the OPEC countries regarding the position on production reduction, hard-won at the end of last year, is beginning to collapse. The most influential member of the cartel, Saudi Arabia, is no longer sure what it chose then right direction. Most oil market participants skillfully took advantage of the decline in production American companies and revived their shale projects. Riyadh has already made it clear that at the May OPEC meeting, disagreements that have accumulated within the cartel may surface. This will serve as an additional incentive to break the memorandum signed by the countries.

Following oil, the value of the currencies of countries that are in one way or another tied to the extraction of mineral resources will also decline. Including Russia. The ruble, as most experts believe, is now excessively overvalued. Unlike oil, whose quotes have decreased by an average of 8-10% since the beginning of March, the value of the Russian currency has lost only 2% in value over the same period. “In the coming trading sessions that will follow the Fed’s decision, the dollar will add several percentage points and reach the level of 62 rubles,” believes Alexey Mamontov.

And this will only be a short-term effect. In the future, the position of the ruble may shake even more. According to FINAM Group analyst Bogdan Zvarich, the main attention of exchange players will be focused on the comments of the Federal Reserve that accompany the decision on the rate. “In them, investors will try to find hints about how soon the Fed will be ready to continue the rate hike cycle or will take a pause to assess the economic changes caused by the March tightening of monetary policy. In total, this year Janet Yellen’s department plans to make 3-4 similar decisions to raise rates. If investors decide that a further rate increase is inevitable in the near future, this could lead to an additional rise in the dollar and a new fall in oil prices. The ruble will then finally find itself between two fires, and the possibility of its strengthening will be in big question,” the expert believes.

According to Alexey Mamontov, the Fed's continuation of the policy of increasing the interest rate, coupled with a decrease in commodity prices, will bring the dollar to 65-67 rubles by the end of this year. If a negative scenario is realized, it is possible that American currency will come close to the 70 ruble mark. We can only hope that this will to some extent benefit the Russian economy as a whole, since revenues from hydrocarbon exports may increase in ruble terms. However, such a favorable outcome will depend on the demand for energy resources this year, the growth of which experts are not yet confident.

UPDATE: Further events, however, turned around contrary to many predictions - .

Illustration copyright Gennady Safonov/TASS

The US Federal Open Market Committee on Wednesday raised its benchmark rate by 0.25 percentage points to a range of 1.25-1.5%. The American central bank is thus gradually tightening its monetary policy.

This is the latest rate hike under current Fed Chair Janet Yellen, followed by Jerome Powell early next year.

Experts expect that he will continue to tighten monetary policy: during the 2008-2009 crisis, the American central bank cut rates to almost zero, and also carried out large-scale asset purchases using newly printed money (these operations were called “quantitative easing”, or QE).

Just a few years ago, the Fed’s policy largely determined the state of global financial markets: flows of money from the American central bank flowed into developing countries, leading to the growth of their markets and strengthening currencies, and also contributed to rising oil prices after the 2008-2009 crisis. The first steps to tighten monetary policy in 2015 led to a fall in markets.

Now the influence of Fed policy has noticeably decreased. The BBC Russian service looked into how the Fed's rate hike will affect the ruble, the Russian market and oil prices in the long and short term.

Why won't markets fall after the Fed's decision?

"Markets have already priced in the Fed's rate hike," Renaissance Capital economist Charles Robertson told the BBC.

The same is stated in the report of the investment division of Sberbank (Sberbank CIB): “the increase in rates has already been fully appreciated by the markets and in itself will not lead to any market reaction.” According to the bank's analysts, the market's reaction will depend on the Fed's forecasts for 2018 - the regulator usually gives a signal about how rates will rise next year.

The market now assumes that the Fed will raise rates 2-3 times next year, Robertson explains. Emerging markets may react if the Fed gives a signal that next year they will raise rates by 3-4 times, the economist explains.

The change of the head of the Fed limits the significance of any assessments, Anton Tabakh, chief economist of the Expert RA agency, disagrees. After a series of new appointments, the dynamics of rate increases may change, he explains. At the beginning of next year, there will be a number of personnel changes at the Fed: not only the head of the Central Bank will change, but also a number of high-ranking officials of the American central bank.

Why does the Fed's policy have less and less impact on emerging markets and Russia?

Fed policy, according to Tabach, has less impact on emerging markets than before, and for other reasons: the investor base in emerging markets has become broader.

This year, the Fed has raised rates three times: at the beginning of the year, the rate was only 0.5-0.75%. Markets in developing countries are growing much faster than those in developed countries. Thus, the MSCI index for developing countries grew by almost 27.7% in 2017, while the British FTSE 100 index added only 7.7%, and the American S&P 500 - 17.5%.

Economists in various reports explain the growth of emerging markets by the acceleration of their economies, for example, the growth of the Russian economy accelerated, and in the middle of the year, many experts, although only slightly.

Tabakh also names another reason: Fed policy changes have become more predictable. They are announced in advance, and investors can “build them into the price,” the economist explains.

The Fed sets rates for the US economy, but the regulator is also concerned about how its actions will affect confidence in global markets, Sberbank CIB chief strategist Tom Levinson explained to the BBC. "US rates are rising, but the gradual rise in rates is supporting emerging markets," the economist explained. Levinson does not see that rising rates can somehow affect the ruble exchange rate.

"The Fed's policy remains soft. This softness means that a lot of money is distributed around the world, including Russia," Robertson adds. According to him, Fed rates, even after the increase, are still significantly below the combined level of economic growth and inflation.

Will rising rates in the US affect the ruble and oil?

The ruble exchange rate in recent months has actually become untied from oil prices, experts and ministry officials economic development Russia. One of the reasons for this is carry trade operations - when investors make money on the difference in interest rates in different countries. They borrow currency from a country with low interest rates, like the United States, and buy currency from a country with high interest rates, such as Russia. And then they invest the money in bonds, which brings additional income.

“Carry trade will inevitably decline on both sides - from rising rates in the United States and from their reduction in Russia,” explains Anton Tabakh.

“Most likely, we will not see a strengthening of the ruble next year; most likely, there will be a weakening,” he believes.

Both Tabakh and Levinson noted that the oil market is almost now independent of the Fed's policy. “Oil prices are now determined by supply and demand factors in the energy market,” explains Levinson from Sberbank. This essentially means that the Fed's policies will not affect them.

Of the 100 economists surveyed, 95 expected the key rate to increase by 0.25 percentage points. According to futures data on the CME Group (a group of the Chicago Mercantile Exchange), on the day before the meeting, the probability of a rate increase by 0.25 percentage points. was 93.5%.

“Most investors have long been confident in the tightening of monetary policy by the US Federal Reserve at the June meeting, which means they took this factor into account when making changes to their portfolios,” notes Finam Group analyst Bogdan Zvarich.

Meaningful decision

“When making the decision, the Fed was guided by the achievement of the so-called full employment on the labor market,” says BCS FG expert Ivan Kopeikin.

Even following the results of the last meeting (May 2-3), experts pointed to the fact that significant decisions are made at extended meetings with a press conference. And so it happened - at extended meetings in March and June, a decision was made to increase the rate. Two more extended meetings will be held in 2017, on September 19-20 and December 12-13.

The US Federal Reserve launched a rate hike policy on December 14, 2015, raising the rate by 0.25 percentage points. A year later, in December 2015, the Fed again raised the rate by 0.25 percentage points. The next increase is 0.25 percentage points. it was in March 2017.

As Igor Dmitriev, head of the Central Bank's monetary policy department, said in an interview with Reuters on June 8, the June Fed rate increase has already been taken into account in the Central Bank's monetary policy. According to him, it is necessary to pay attention to the accompanying comments. The Fed's focus on inflation or the labor market will make it clear future plans The Fed to raise rates, he indicated.

Experts interviewed by RBC also advise paying attention to the Fed’s comments. As Zvarich notes, as the rate increases, funding in dollars becomes more expensive. As a result, the spread between the cost of funding and the return on Russian assets becomes smaller. Hence the decline in interest in Russian instruments, explains the expert.

“An increase in the base rate will likely reduce appetite and, accordingly, have a negative impact on Russian assets and the ruble, but the effect will be insignificant, since the decision is already included in the prices,” says BCS FG expert Ivan Kopeikin.

A change in the Fed’s rhetoric and market expectations regarding the trajectory of the rate increase may affect the Central Bank’s further steps, says Yakov Yakovlev, senior analyst at Aton Investment Company for macroeconomics and debt markets. According to Zvarich, if the Fed takes a pause in the rate hike cycle until December 2017, the Central Bank will be able to further reduce the rate at upcoming meetings.

“Naturally, an increase in the Fed rate will lead to some pressure on the Russian ruble (which, however, is moderately favorable for exporters and the federal budget), says Sergei Khestanov, macroeconomics adviser to the general director of Otkritie Broker.

Market reaction

American indices reacted to the Fed's decision with a moderate decline. By 21:45 Moscow time, relative to the opening level of today, the S&P 500 index fell by 0.25%, to 2434.1 points, NASDAQ - by 0.53%, to 6188.2 points, the Dow Jones Industrial Average - by 0. 06%, up to 21314.9 points. The DXY index (showing the ratio of the US dollar to a basket of six major currencies - the US's key trading partners) decreased by 0.07%, to 96.9 points.

The decision had a moderately negative impact on the ruble exchange rate. On the MICEX, the ruble exchange rate against the dollar decreased by 0.78%, to 57.42 rubles, and against the euro - by 0.98%, to 64.51 rubles.

The American stock market rose after the Federal Reserve's decision to increase the base rate. The day before it became known that the US Federal Reserve System (FRS) increased the interest rate to 1.25-1.5% from 1-1.25% per annum.

After that, the American market closed in positive territory. Thus, the Dow Jones industrial average increased by 0.03%, to 24585.43 points, the broad market index S&P 500 decreased by 0.05%, to 2662.85 points, the NASDAQ high-tech index increased by 0.2%, to 6875 .80 points.

The American regulator was able to make the decision to increase the rate against the backdrop of an improving economic situation.

"Information since the Fed's November FOMC meeting shows that the labor market continues to strengthen and economic activity is picking up at a robust pace this year."

— indicated in a message issued by the financial regulator on Wednesday following a meeting of its management.

At the same time, the Fed also points to a faster decline in the unemployment rate than predicted. "Related to natural disasters The disruption and recovery have affected economic activity, employment and inflation in recent months, but have not significantly altered the course of the nation's overall economy,” the Fed also said in a statement.

This Fed decision was quite predictable. Thus, only 4 out of 97 experts surveyed by Bloomberg expected the rate to remain at the same level, while all the rest predicted an increase in the rate to 1.25-1.5% per annum.

The Fed's current decision to raise rates is the third since the beginning of 2017.

The regulator raised the rate in June to 1-1.25% and in March to 0.75-1% per annum. Previously, the pace of Fed rate increases was slower: the rate was increased one-time in both 2016 and 2015. In 2007-2008, the Fed gradually lowered the rate due to the need to stimulate economic growth. In December 2008, the rate reached a minimum of 0-0.25%.

For 2018, experts predict that the rate will be increased to 2.25%. The economic situation in the United States will allow the American regulator to take such a step. The Federal Reserve expects the country's economic growth rate to increase in 2018 from the previously projected 2.1% to 2.5%, Janet Yellen, Chairman of the Fed Board of Governors, said on Wednesday.

“We expect US economic growth to pick up next year from the 2.1% forecast in September to 2.5%. At the same time, the unemployment rate will drop to 3.9% from the current level of 4.1%,” she noted. The US unemployment rate is the lowest in 16 years.

Considering that a meeting of the board of directors of the Central Bank will take place on December 15, at which the Russian regulator may lower the rate, the Fed’s decision may lead to foreign investors withdrawing from Russian assets, since such investments will give investors much lower returns and will be less interesting.

As the director of the Institute noted recently at a meeting of the FBK economic club strategic analysis company Igor Nikolaev,

“ruble stability” this year was achieved due to the influx of funds as part of carry trade operations. According to market participants, the share of non-residents in the federal loan bond (OFZ) market exceeds 30%.

At the same time, a gradual increase in the Fed rate will add instability to the ruble.

In addition, in November of this year the Ministry of Finance received a lot of additional oil and gas revenues. So much that by the end of December it will use almost 204 billion rubles to purchase foreign currency. This is a record figure since February, when the financial department entered the foreign exchange market. The amount of such interventions is twice the amount of purchases in November, notes Alor Broker analyst Alexey Antonov.

The Ministry of Finance's interventions in December will also play against the ruble. Analysts interviewed earlier by Gazeta.Ru noted that the actions of the financial department will become another factor leading to the weakening of the Russian national currency. The only question is the timing and scale of the fall.

“In my opinion, the impact will be noticeable, but not predominant. At the end of the year, the activity of importers and banks will increase, which will have a stronger impact on the ruble. The actions of the Ministry of Finance will lead to an increase in trading volume by an average of 6%,” previously commented Georgy Vashchenko, head of the department of operations on the Russian stock market of Freedom Finance Investment Company. By the end of this year, the expert expected the rate to be around 60.50 rubles per dollar.

The dollar exchange rate on the Moscow stock exchange is now 58.61 rubles.