Posted at 9:00 a.m.
“I would like to know why the ruble has regained its pre-war value despite the measures taken by NATO. —Bernard Fontaine
To answer this question, The Press called on the skills of Hendrix Vachon, Senior Economist at Desjardins Group.
The ruble is not the best indicator of the effect of the measures taken by the Organization of the treaty of the North Atlantic, NATO, indicates from the outset Hendrix Vachon. “You have to consider all the economic indicators,” he explains over the phone.
PHOTO EDOUARD PLANTE-FRÉCHETTE, LA PRESSE ARCHIVES
Hendrix Vachon, Senior Economist at Desjardins Group
GDP
“Most forecasters expect Russia’s GDP to fall by 10% and even more in 2022. So the country will face a severe economic crisis, there is no doubt about that,” says the Economist. The next few months, the next quarters will be very difficult for the Russian economy. »
Why has the ruble regained its value?
After the ruble’s rout in late February and early March, Russian authorities implemented several measures to support the rouble.
They hiked interest rates, forced domestic businesses to hold more rubles, and urged international customers to pay in rubles. This has increased the demand for this currency.
“Not all the countries have agreed to pay in roubles, specifies the expert, the NATO countries refuse to do so. But some agree when buying products from Russia. The authorities’ measures therefore helped to stabilize the currency. »
As the West has curbed imports into Russia, as there have been many trade embargoes, Russians can no longer sell rubles to buy the foreign products they would like to have. “The Russians no longer sell rubles, which increases its value,” explains Hendrix Vachon.
If preventing the import of products increases the value of the ruble, in return the country will soon run out of parts in its computer, automobile and aeronautical industries. “So major problems are to be expected in the coming quarters,” continues Mr. Vachon.
The economist also wonders about the real value of the Russian currency. The ruble is traded less than before and with fewer countries than in the past.
Is its price really representative? We have doubts on that. It is no longer priced as much as investors would actually be willing to pay. It may therefore be artificially overvalued.
Hendrix Vachon, Senior Economist at Desjardins Group
“All these reasons mean that the ruble seems to be doing well, but this is not a sign that the economy is doing better or that the measures we have applied are not having an effect. »
According to the expert, a fatal blow could be dealt to the Russian economy if European countries stopped buying Russian oil or gas. “We see that in Europe, this idea is gaining ground,” he concludes.
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