«The ruble is underestimated»: Deutsche Bank predicted the imminent weakening of the dollar

CC0 / qimono / puzzle in the form of 100-dollar bills«The ruble is underestimated»: Deutsche Bank predicted the imminent weakening of the dollarCC0 / qimono /

MOSCOW, 1 Okt — news, Natalia Dembinski. Deutsche Bank has recognized the ruble one of the most undervalued currencies in the world. By calculations of economists of the Bank, the Russian currency now is 15 percent weaker than its «fair rate» and may soon return to the level of 60 rubles per dollar. How justified such a forecast and to what values it is ready to grow the ruble — in the material RIA Novosti.

In addition to the Russian currency, the three most undervalued German Bank included the Turkish Lira and Colombian peso. The five most perioralny — Czech Koruna, Swiss franc, Korean won, Thai baht and us dollar.

In their calculations, economists at Deutsche Bank used a methodology to assess the behavioural equilibrium exchange rate (Behavioral Equilibrium Exchange Rate, BEER), developed by the British economists twenty years ago. This technique allows you to track discrepancies between the real exchange rate and the macro-economic indicators such as inflation, productivity and so on.

The ruble has strengthened to highs for a month and a half and continues to go up, this has not prevented even increase the interest rates the U.S. Federal reserve, attracting investors to dollar assets, and oppressive on the currencies of developing countries.

As stated in the review of Deutsche Bank, an important role in the strengthening of the ruble has played a Central Bank — the regulator raised the rate for the first time in 2014, and in addition, has suspended the purchase of dollars in the market until the end of the year. Support for the Russian currency has had macroeconomic stability and, of course, the high price of oil. At the same time, the main threat for the ruble are still U.S. sanctions.

«If the Russian currency will show a too rapid tendency to strengthen the Central Bank are stepping up purchases of foreign currency for the Finance Ministry to roll back the rate to the desired level» — suggests Sergei hestanov, associate Professor of financial markets and financial engineering of Ranhigs.

«The critical can be considered the range of 63-65, the ruble is unlikely to strengthen further,» — said Andrey Egorov, currency strategist at Oanda. The essential budget level is estimated at 66 to 68 rubles to the dollar.

On the other hand, with sanctions in history, recently only gaining momentum, is not so clear. The U.S. Treasury has already admitted that the Russian economy is impossible to impose too strong sanctions, like against Iran. Excessive restrictions have a negative impact on Americans.

Russia’s foreign debt, amounting to more than half a trillion dollars, mostly denominated in U.S. currency. Therefore, any significant restrictions on Russian banks will lead to force majeure on the payment of external obligations, which will inevitably affect the us credit organization.