When respectable men in suits talk about devaluation and inflation on television, the Russian audience is divided into three main groups. The former begin to panic and chaotically think about where to put their savings, because there was already a savory experience in 1998 and 2008. The second, having no family and gold reserves, believe that they have nothing to lose. A third, very small group believes that the situation is under control of the authorities and is about to improve.

Which of them is closer to the truth?

What is devaluation in simple terms

All states take part in trade operations in the world market. To simplify the system when making transactions, the partners set the standard of a convertible currency, for Russia this standard is the US dollar and the euro.

Previously, before the “gold standard” was abolished, the devaluation of the ruble was considered to be a decrease in the value of the national currency in relation to gold. Now the situation has changed.

Another significant change occurred in the fall of 2014. Until that moment, the value of the ruble was regulated and fixed by the Central Bank (CB) of Russia, but now the domestic currency is deprived of this support.

Many Russians who are not professionally connected with the economy confuse devaluation with default and denomination.

I must say, these concepts are completely different, so:

1. Devaluation today is considered to be a decrease in the value of the ruble against the currencies of other states.
2. Denomination is a change in the number of zeros on a banknote, which Russians faced in the nineties of the twentieth century.
3. Default is a more critical situation in which the state is unable to meet its financial obligations, including external debts.

The reasons for the depreciation of the national currency may be different. These include the weakening of the economy, as a result of natural disasters, sanctions, warfare, that is, an increase in government spending that is no longer covered by income.

There is another situation: the state deliberately lowers the value of its currency, which allows you to get a significant profit from the export of goods. For example, the price of oil in dollars has dropped significantly, but since there are now more rubles in dollars, the change in this price in rubles is not so significant.

Thus, devaluation can be beneficial to the state.

Will there be a devaluation in 2019

Together with the Russians, citizens of other countries are also asking this question, out of sympathy or for a completely opposite reason. So far, no one can give an unequivocal answer with an absolute guarantee, however, the months that have passed since the beginning of the year show actual indicators.

As the graph shows, the exchange rate of the American currency is highly dependent on sanctions coming mainly from the United States. The strongest speculative factor is the restriction on the purchase of government debt for US companies. In other words, the popular “carry trade” strategy of buying Russian for dollars and getting a decent return by world standards may cease to exist due to legal restrictions. All this encourages foreign investors to sell Russian bonds, buy dollars and withdraw them from our securities market.

Most analysts consider investments in the Russian economy as rather risky investments, which means that the outflow of capital from the country will continue to some extent.

To be or not to be devalued in the current year depends on many factors:

• outflow of capital from the country;
• oil prices;
• the imposition or lifting of sanctions;
• Fed (Federal Reserve) rate adjustments;
• the conduct or cessation of hostilities in Ukraine and the degree of participation in these events of our country.

It is unlikely that anyone will take responsibility for accurately predicting these turnarounds, but if they are not in a positive direction for Russia, it will be impossible to count on stability, and even more so on the appreciation of the ruble.

I must say that devaluation is not a one-day process, which means that it will not be possible to solve the problem in one day. According to experts' forecasts, sharp fluctuations are not expected this year, although in the event of new oil price drops, the dollar exchange rate may rise to 100 rubles.

How loans will be issued

According to professionals in the field of economics, this year one more reason for the devaluation will be added: the outdated banking system, which needs to be corrected. One of the main banking issues of concern to the population is the possibility of obtaining loans.

In times of fluctuations in the value of the ruble, the population is afraid to trust their savings to banks, as a result of which money is withdrawn from circulation and the resources that banks can have become noticeably scarce. These events lead to certain changes in the lending system.

Last year was definitely difficult for the Russian economy, which inevitably affected banks and financial institutions. Many of these institutions have not been able to stay afloat during the crisis, and as a result, the number of organizations providing loans will noticeably decrease in 2019.

In this regard, the following changes are expected for borrowers:

1. Raising base rates and interest.
2. Inclusion of a number of commissions for issuance and service.
3. Age category of borrowers (in some organizations, applications from clients will be considered only after they reach the age of twenty-five).
4. Voluntary-compulsory insurance of loans.

It should be noted that the demand for loans will also decrease. Not everyone will risk burdening themselves with such obligations in such an unstable period.

With the lifting of Western sanctions, it will be quite possible to count on the loyalty of banks.

Learn about the denomination or devaluation of the ruble from the video.

How to save money during currency fluctuations

To preserve savings in the current difficult circumstances, analysts and economists recommend shares of companies producing exports, precious metals, real estate and foreign currency.

Many experts consider it promising to spend capital on opening a well-planned and well-thought-out business, since the number of competitors will noticeably decrease at this time.

A detailed study makes it clear that with devaluation, import prices rise, and the demand for domestically produced goods will increase accordingly.

Imported cars, electronics, household appliances will rise significantly in price, so it's time to spend the savings accumulated for these purposes. Only without fanaticism, because many people remember how in 2014 panicked people began to buy useless things in unnecessary quantities, and then did not know how to get rid of them.

Today, "multi-currency" accounts are very popular, the owners of which have the opportunity to transfer their savings from one currency to another, with a favorable exchange rate.

The consequences of the devaluation of the Russian ruble

Probably, everyone is familiar with the situation when you really want something, and a person, succumbing to temptation, makes an unplanned expensive purchase. Then, for a certain time, he has to deny himself something, restoring the family budget.

The same is happening with the state budget, which has a gap and it will take time to patch it up.

The devaluation effects could be compared to two sides of a coin if it had different sides.

So the negatives are:

1. Increase in prices for goods and services at the same wages.
2. Loss of confidence in the weakened ruble.
3. Devaluation of bank deposits.
4. The increase in inflation.
5. Decreased purchasing power
6. Unemployment. After all, many enterprises use imported raw materials, equipment, materials, but due to the rise in price they will be forced to reduce or completely stop their activities.

You should also not forget that when a person does not have enough money, he often begins to take bribes and steal. This means that the likelihood of an increase in the level of crime and corruption is high.

And now for the good:

1. Stimulation of domestic production and import substitution.
2. The development of tourism in Russia, as Holidays abroad will become an expensive pleasure.
3. If you refuse to import, more money will remain in the state treasury.

Even a child, counting the points, will notice that the negative consequences prevail.

Possible scenarios and expert forecasts

As for Russian analysts and experts, the forecasts here are very diverse, and mostly short-term. Even the most experienced specialists find it difficult to predict events for the second half of this year and next year.

The head of the Ministry of Economic Development, Alexei Ulyukaev, believes that this year the dollar will be valued at around 63-64 rubles.

Former Finance Minister Alexei Kudrin's forecasts are not so optimistic: he predicts a collapse of the Russian economy and a decline in the standard of living of the population. Economists Vladimir Tikhomirov and Nikolai Salabuto agree with him, expecting the dollar to rise in price to two hundred rubles per unit.

The well-known economist Mikhail Khazin predicts the collapse of not only the Russian, but the entire world economy and banking policy.

On one point, the opinions of domestic experts are similar: everything will depend on the price of "black gold", around which the Russian economy is currently revolving.

The depreciation of the ruble is reflected in the economic situation of our neighbors and partners. In Belarus, the ruble is also devaluing, despite the assurances of President Lukashenko that there will be no devaluation in the country this year.

However, experts and analysts have a different opinion. The dependence of Belarus on Russia is obvious, because our country is the main buyer of Belarusian exports, and if their ruble is more stable than ours, trade will simply become unprofitable for Russians, and Belarus risks losing a partner.

In addition, the rise in the dollar rate is dictated by world oil prices, which the government of Belarus is unlikely to be able to influence.

Another factor is the impending denomination of the Belarusian ruble, and it is not known in which direction prices and salaries will be rounded, which means that people are worried and begin to withdraw money from bank turnover and hide it in stockings. As mentioned above, the withdrawal of money from circulation is one of the causes of devaluation.

All experts are sure that devaluation of Belarus this year cannot be avoided, but sharp fluctuations are not expected. Bankers and financiers fully agree with them.

So what determines the exchange rate of the ruble

The exchange rate of the national currency is influenced by a combination of the following factors:

1. Stable political situation in the country, attracting partners and investors.
2. Trust in the national currency, both the local population and foreign citizens.
3. Development of production, industry and agriculture.
4. Oil prices on the world market.

Based on this list, a lot still needs to be done in our country, which means that all Russians will have to work hard.

In contact with

The reverse process of increasing the price of a currency is called revaluation.

There are two main reasons why central banks are forced to devalue: a deterioration in a country's trade balance, when imports prevail over exports, and high inflation.

As a result of devaluation, imports become more expensive, and exports cheaper, which allows us to solve a number of problems:

Increasing the competitiveness of goods in international markets,

Stimulates domestic production, which begins to work on import substitution.

In modern Russia, the devaluation was carried out twice. For the first time since the announcement of the default in 1998, when within a few months the exchange rate of the ruble against the dollar fell by 246% - from 6.5 to 22.5 rubles per dollar.

The second time the devaluation was at the end of 2008. During the autumn, the exchange rate fluctuated between 26–27.60 rubles per dollar. At the end of December, the rapid growth of quotations began, and all this time the Central Bank was constantly pushing the boundaries of the currency corridor. In January, the official statement of the regulator on the establishment of new borders followed with a promise that they would remain unchanged, while maintaining oil prices not lower than $30 per barrel. The ruble exchange rate continued to fall until February, coming close to the upper limit of the currency corridor set by the Bank of Russia.

The historical maximum of 36.45 rubles was recorded on February 19. Thus, since December 2008 the exchange rate of the national currency has weakened by more than 30%.

Twice the main reason for the devaluation was the decrease in the trade balance, which occurred due to the fall in oil prices on world markets. But if in 1998 the devaluation took place spontaneously in the conditions of the state default, then in 2008 it was “planned”, and at least $150 billion was spent on its implementation.

It is believed that the 1998 devaluation reduced the volume of imports by 50% in dollar terms, and in 2009 by about 20%. In the first case, this led to an increase in domestic production. In the second, it helped to reduce the impact of the global financial crisis on the Russian economy.

At the same time, devaluation also has negative consequences. The national currency is losing the confidence of both investors and the population, investments are depreciating, there is a rush withdrawal of money from the banking system.

The events in the Republic of Belarus in 2011 can serve as an example of the negative consequences of devaluation. On May 23, the National Bank of Belarus devalued the Belarusian ruble by 56%. At the same time, a decision was made to return the currency corridor canceled since May 11 and to limit the currency purchase and sale rate on the over-the-counter market and in exchange offices. At the same time, inflation in Belarus since the beginning of the year has already exceeded 15%. As a result, mass protests take place almost every day in the country.

During the devaluation, conditions are created for speculative transactions in the foreign exchange market. So, it is believed that on the devaluation of the pound from 2.01 to 1.51 to the dollar in 1992, George Soros made his fortune by managing the money of the Quantum hedge fund.

History shows that devaluation, as a rule, is a rather lengthy process and does not occur suddenly. Therefore, an ordinary investor, at the first signs that a devaluation is being carried out, needs to transfer his savings into assets denominated in another currency as soon as possible.

Greetings, dear readers! Ruslan Miftakhov is with you, and today we will analyze what the devaluation of the ruble means, and what are its consequences.

If you are interested in news and often hear this word, then you will certainly be interested in this article. Currency devaluation is a process during which the exchange rate of the national currency falls in comparison with other currencies.

Let's give a small example: the ratio of the Russian ruble to the dollar at the moment is $1 to 57 rubles. And if this ratio changes, and $ 1 becomes equal to a value above 57 rubles (say, 60 and more), then this will be called devaluation.

Simply put, as a result of this process, you need to pay more rubles in order to purchase foreign currency.

Devaluation is often compared with inflation (we got acquainted with this process in the article), because both processes reduce the purchasing power of money and are the price for the country's technological backwardness.

The difference is that during devaluation, the solvency of the ruble decreases in comparison with other currencies, and during inflation, the currency within the country depreciates.

What are its main types?

Devaluation can be official or hidden, as well as controlled or uncontrolled.

With the official openly conducted by the state, devalued banknotes are withdrawn from circulation, or they are exchanged at the current rate (denomination).

However, the method of regulation, when the bank officially lowers the rate by signing the corresponding document, is already in the past, when exchange rates were pegged to gold.

With hidden- depreciated money is withdrawn from the population by the state.

controlled- assumes, in the event of a threat of currency depreciation, support for the value of the ruble in various ways. For example, there are indirect methods for regulating market mechanisms - foreign exchange interventions, and others (intentionally increase the upper limit of the currency corridor, and encourage the growth of foreign currencies on the exchange market.)

When the state has run out of all the mechanisms to support the exchange rate, and it cannot be controlled by the central bank, uncontrolled devaluation.

In the current conditions of our country, this type of devaluation is taking place, and it was not possible to correct it after the establishment of a currency corridor and the sale of gold and foreign exchange reserves.

Its main surge occurred in 2014, when, due to the fall in the cost of oil on the world market and the introduction of economic sanctions against the country, and the subsequent panic of the population, the Russian ruble fell against the dollar almost 2 times during the year.

However, now its influence on the country's economy is insignificant, and the share of exports is gradually increasing. And if we make every effort, then by the end of the year the volume of imported goods should decrease by 30%.

What does this lead to

Banks are forced to devalue for the following main reasons:

• if the country's trade balance is declining (imports exceed exports);
• with a significant increase in the level of inflation;
• if necessary, increase the exported goods and attract foreign currency.

After this operation, exports become cheaper, and imported goods rise in price, which improves the country's balance of payments, increases the competitiveness of Russian goods on world markets, and activates domestic production, which gradually replaces imported goods.

Some citizens with stable earnings consider this process very beneficial for acquiring property, as well as valuable things on credit - apartments, appliances, cars. After all, the actual monthly payments on loans are unchanged, and the cost of purchased goods is growing.

1. When the national currency depreciates, manufacturers have to increase prices for their products, which provokes inflationary processes, and salaries, pensions, allowances and scholarships that have remained at the same level depreciate as prices rise.
2. The population no longer trusts the devalued ruble, and with excitement withdraws savings from banks, converting them into foreign currency.
3. There is an outflow of investors' capital from the country.
4. There is oppression of imports, because of which productions based on foreign raw materials suffer. The purchasing power of the local population to purchase more expensive imported goods is also declining.
5. Speculative operations are created in the foreign exchange market (for example, when the pound fell in 1992 from 2 to 1.5 against the dollar, D. Soros, who managed the money of the Quantum hedge fund, made a fortune).

The reverse process of devaluation is a revaluation in which there is an increase in the exchange rate of the national currency in relation to foreign ones, or to gold.

It helps to reduce inflation, but stimulates an increase in imports and reduces the level of the country's trade balance.

Speaking of global world processes, the devaluation of the dollar can cause many chain reactions, which will lead to a fall in the exchange rates of all currencies dependent on the dollar. For Russia, which has debts, such a reduction will be beneficial.

However, in order to improve the economic situation in the country, and for the development of domestic production, it is necessary that the dollar rises. Therefore, scientists and specialists face the important task of finding the optimal ratio of the Russian ruble to foreign currencies.

Based on history, devaluation means a long process that does not occur by chance, it has its positive and negative sides. And investors, in the event of the first signs of a fall in the exchange rate, it is better to quickly transfer all assets to a more reliable currency.

So we have come to the end of the article, I hope you found useful and informative information in it for yourself.

And now I propose to watch a fascinating video about drifting, what kind of car he has, I still don’t understand. Maybe you know? Write in the comments.

Sincerely, Ruslan Miftakhov.

In the conditions of the crisis inside the country, we are increasingly hearing about the "impending" devaluation of the ruble. However, not every person fully understands what the very concept of “devaluation” means. Is it so scary for the average resident of Russia?

Devaluation - what is it in simple words

Devaluation is the process of reducing the value of the national currency (its gradual depreciation) in comparison with the value of currencies in other countries in systems where the exchange rate is fixed. It must be understood that the national currency of any state is backed by an internal stock of gold reserves. The more gold reserves in a country, the stronger and more stable its currency, the more valuable it is in comparison with the currencies of other countries. The price of the national currency will fall if the country's gold reserves decrease. And this process is called devaluation.

It is important to understand that devaluation and inflation are different concepts, despite the fact that both processes lead to a decrease in the value of the national currency and a natural increase in prices. Inflation is the depreciation of a currency in a particular national region. Devaluation, in turn, is the depreciation of the currency in international markets. Devaluation, unlike inflation, the state can control.

Ruble devaluation

The main reasons for the devaluation of the ruble, which we have to observe from time to time, is the uneven development of inflation in different countries of the world (as a rule, we are focused on the countries of Europe and the USA in this matter), which leads to a deficit in the balance of payments. Despite the fact that the main factors influencing the devaluation of the ruble are macroeconomic, it is the regulatory authorities in our country who decide to depreciate the national currency. The refusal to maintain the ruble exchange rate at a certain level is motivated by the need to reduce the country's balance of payments deficit. Only in this way the country gets the opportunity to stimulate domestic production and increase the competitiveness of its products within the country and abroad.

The refusal to maintain the ruble exchange rate at a certain level is motivated by the need to reduce the country's balance of payments deficit.

National currency

The national currency of our state has a fixed exchange rate. This is what causes devaluation at certain stages of national economic policy. In countries where the currency "floats" and does not have a fixed rate, all the process of devaluation / revaluation occurs automatically. In our country, devaluation is carried out only when the Central Bank realizes that the current exchange rate is somewhat overvalued and may adversely affect the economy. This happens in situations when the inflation rate of the national currency increases and the trade balance becomes unfavorable for our country.

The main purpose of the devaluation of the national currency is to make domestic products cheaper in comparison with imported products, increasing the competitiveness of the former. Of course, this affects the level of trust in the country, but this measure is justified by economic factors.

The main purpose of the devaluation of the national currency is to make domestic products cheaper in comparison with imported products, increasing the competitiveness of the former.

Last devaluation

If you follow the information of official sources, the residents of our country had to observe the most recent example of the devaluation of the ruble in the third quarter of last year. It was then that the value of the ruble against the dollar fell sharply from 33.63 rubles to 57-80 (rate jumps occurred almost daily). However, no one officially called the example of 2014 a devaluation - it is rather a variant of a hidden devaluation.

The official devaluation of the national currency was carried out in 2009 at the very peak of the global financial crisis, when it became necessary to take measures to mitigate its consequences within the country.

Devaluation amount

The amount of devaluation, as a rule, is set by the Central Bank and is calculated as a percentage (10%, 15%, etc.). The percentage means how much the value of the national currency will change downwards compared to the value of the currencies of other countries (the US dollar and the euro will serve as a guide). It must always be remembered that the size of the devaluation today will certainly affect the inflation rate tomorrow.

In conditions when a huge amount of products are imported into the country from abroad, there is a natural increase in prices. On the other hand, it is the importers who begin to take on part of the increase in costs, since they need to sell imported products. Devaluation makes it possible to "slow down" the inflation rate within the country and improve the economy in times of crisis.

Advice from Sravni.ru: Information about changes in the exchange rate of the national currency is best tracked on the official website of the Central Bank.

Devaluation- a phenomenon that always upsets ordinary people. With the depreciation of the ruble, the purchasing power of the population is falling. Since the majority are paid in national currency, every trip to the store becomes a chagrin: you can buy less and less with honestly earned money.

How devaluation occurs

Now let's see how devaluation occurs, what leads to it. When regulators devalue, they are adjusting domestic financial policies. In essence, they protect their country's currency from other currencies that are more popular in the market. As a result of this process, the rate is as close as possible to the real one.

This procedure is periodically carried out in many states. Ordinary people lose from it, and the problem of savings comes to the fore. To minimize losses from devaluation, experienced investors invest in stocks. If you choose assets wisely, you can not only protect your money from depreciation, but also increase capital.

Oddly enough, in some cases, devaluation is beneficial. It benefits raw material monopolists, import-substituting enterprises, individuals whose labor is paid in foreign currency.

The state can also benefit. When world oil prices fell, Russian budget revenues plummeted. But due to the depreciation of the ruble, these losses are slightly compensated. When our currency weakens, every euro or dollar that enters the country is worth more. Since budget expenditures remain in rubles, the treasury deficit is not so large.

After the fall in sales in the national currency and the saturation of the market with foreign money, the Central Bank may decide to withdraw part of the currency from circulation. The ruble will begin to fall against the dollar, and people may begin to deposit their savings in foreign currency. This procedure is an open devaluation.

Consequences of the depreciation of the national currency

If we talk about the current risks of ruble devaluation, it is worth highlighting its strong dependence on the dollar. This is especially felt in recent years, when Western countries have imposed sanctions against Russia. In difficult conditions, the state is forced to pursue such a financial policy, but the main blow is taken by the people. For him, the consequences of devaluation are sad:

• Rising prices, due to which consumer demand is rapidly declining.
• Fewer imported goods enter the market.
• Due to the lack of competitors, domestic products also begin to rise in price.
• The level of labor migration is on the rise.
• People depreciate deposits in banks that were made in the national currency.

The devaluation deals a tangible blow to Russian enterprises that are forced to buy raw materials abroad. The result is a strong rise in the cost of goods or the bankruptcy of companies, which certainly does not benefit the domestic economy.

We are experiencing all these changes. As soon as the ruble bows its head to such global giants as the dollar and the euro, the standard of living of both freelancers and office workers is rapidly falling. Well, if you receive a fee in foreign currency. But even in this case, losses are inevitable, because you have to pay for goods and services in rubles, that is, more expensive than usual.

Is it possible to reduce dependence on the national currency

Since the state has the right to control the market, few people manage to avoid the sad consequences of the devaluation. Fearing another collapse of the ruble, we are forced to make a decision: how much to keep in rubles, and how much to invest in the purchase of foreign money or other assets. To make the right choice, people sometimes resort to the help of financial analysts.

I have to say that you shouldn't put all your eggs in one basket. It is best to invest in different projects: cloud mining, buying crypto, bank deposits, or someone else's proven business. If there is a recession in the economy or even another default, we will have a certain safety cushion.

Not only you and I are forced to make a decision about the safety of our savings. Devaluation is a common occurrence for those countries that are most dependent on the euro and the dollar: Poland, Ukraine, Romania, Greece, the Baltic states.

I could name the so-called Hungarian breakthrough, which happened in this Balkan country in 1946, as a particularly striking example of devaluation. In those difficult times, the Hungarian currency depreciated at a rate of 400% per day.

Fortunately, such cases are an exception, and it is impossible to calculate the return on investment during this period. But if the annual inflation rate does not exceed 15% per year, it is quite realistic to calculate what dividends will be brought by investments in a particular project. Of course, you choose the currency and its amount yourself.

A bit about competitive devaluation

It is worth saying a few words about another type of devaluation - competitive. I think everyone has heard about trade wars between countries, but there are also currency wars. Sometimes currency pressure is the best way to influence a particular country. Devaluation may be the only way to get rid of it.

To minimize the risks from currency wars, I would advise you to choose trust management. If you choose a worthy company with a competent expert, he will help you choose the most effective investment instruments. This will save money, but self-study of the market will only benefit us.

What to do with the ruble

Although the ruble does not always live up to expectations, it is our national currency. Even our mothers, fathers, grandparents rejoiced at its strengthening and grieved over the loss of their hard-earned savings. Interestingly, the ruble changes positions dramatically in those years in which there is a figure eight. Just remember the default of 1998 and the downward thrust in August 2008.

Still, I believe that devaluation is not a reason for panic. You just need to try to invest money wisely in order to protect yourself from the vicissitudes of fate.

Even the strongest national currency sometimes loses its value. Its value is influenced by a variety of factors: the political situation in the world, economic crises in different countries, the emergence of cryptocurrencies, and much more.

All this greatly affects our ability to consume, but we should not be idle either. You need to regularly monitor the situation on the market, study the profitability of investments in certain assets and improve your financial literacy. Of course, not a single person is immune from the negative consequences of devaluation, but we will try to minimize them. I sincerely wish you good luck and financial prosperity!