In the face of international sanctions, Russia has been attempting to keep the USD/RUB exchange rate down through monetary policy. The exchange rate peaked at 134 on March 11th, 2022, but fell to around ~60 for the latter half of 2022. Throughout 2023, it has been steadily rising.
Will the USD/RUB exchange rate exceed 100 for a continuous period of 30 days in 2023? Resolves according to the prices displayed on Google Finance.
Clarification:
Exceeding 100 for a continuous period of 30 days means that Google Finance must display the daily price as >100 for 30 days in a row. In line with my other USD/RUB market, this will be assessed by looking at the data points from the Google Finance monthly chart. It seems this was the consensus understanding, but if anyone feels deceived by this, you can leave a comment.
Currently, Oct 5th, 6th, and 7th are showing as >100, so we are at 3 continuous days.
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@Ouroboros Would an "early" resolution be in place here, since it is no longer possible to meet the Yes-Criteria?
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There are several factors that might lead to a continued increased in the USD/RUB, above 100 mark within the next 90 days: (1) conflict in the arab world between Israeli and Palestina, (2) subsecuent capital outflows to safe investments in dollars, (3) increasing inflation in Russia, (4) russians taking capital outside the country, and (5) russia's current account surplus fell 86% compared to the same period in 2022, plus (6) the net capital flows has drastically decreased. All this explained a continued and solid increase in the USD/RUB, making it more probable to continue with an exchange rate above 100.
@EduardoSoto Why I think it won't happen: 100 is too much of symbolic value, they'll find a way to push it down!
@EduardoSoto I agree with you, and I think the exchange rate will exceed 100 because the dollar has been being the strongest due to the healthiness of the US economy than the other countries. The dollar currency will keep its value and remain the most popular in the fields of economy, trade, financial market, and political system as well.
This can be caused by lowering the rate of unemployment in the U.S. and its economic growth is much stronger than G7 countries (Center for American Progress, 2023). The U.S. has been recording the lowest rate of inflation along with economic recovery among the Group of 7 countries (Center for American Progress, 2023).
@MrLuke255 i assumed it has to close a day under 100
like are we gonna watch 1min candles??
@nickten Continuous period of 30 days sounds like the whole chart, not only closing prices
@JuJumper Apologies for the lack of clarity in the resolution criteria. The intention was to use daily prices reported by Google Finance, in line with my other USD/RUB market. E.g. to resolve YES, the price must be displayed as >100 for 30 days in a row (--> continuous) on the Google Finance monthly chart. I will update the resolution criteria to clarify.
It looks like many forecasts for USD/RUB predict that it will go further up, but I wonder, did they predict this weirdness on the graph? ๐ค
Why wouldn't it drop like this before the full month has passed? And this drop doesn't have to be as big, only to fall below 100.
@MrLuke255 The drop happened because Kremlin increased the interest rate to about 20% and found ways to circumvent the first sanctions. Now Russia is running out of foreign currency to support the Ruble.
They are now forced to pay for the war by printing money. Thatโs the reason the inflation will continue.
@IonMarqvardsen They could find some ways to stabilize the currency, like they required to pay for gas in Rubles and some countries complied. But you might be right, we'll see
@MrLuke255 I believe theyโve been doing everything they can do, except capital controls. And printing money is just easier to accept for the oligarchs.
What can Russia do to prop up its currency?
Increase the interest rate? Capital control? Reduce spending? Stop the war? Exit Ukraine?
Inflating the ruble is probably the preferred way for Kremlin to pay for the war.
@IonMarqvardsen I guess they could use up their foreign currency reserves for a temporary boost to screw up this market. Or end the war to get rid of the sanctions.
@gigab0nus ๐ yes. ๐
โEnding the warโ is impossible for Putin, because that starts a process of paying for damages. Politically, he cannot survive without a victory.