What threatens the "free floating" of the ruble? Why does the Central Bank lower the ruble in "free float"?

Almost all experts say that the Russian economy has fallen into the trap recently. But how does the free floating of the ruble threaten? A simple citizen of Russia may think that such financial issues do not concern him, but in fact, it is ordinary citizens of our country that this problem will primarily affect.

What is a "free float"?

It is not surprising that today not only investors, but also ordinary Russians actively monitor the situation on the foreign exchange market. The ruble goes into free swimming, and it practically can mean that soon the majority of the inhabitants of Russia will have a lot of financial problems. The fact that the national currency could become uncontrolled became known last year. Leading experts and financiers have repeatedly said that the Central Bank (CB) is ready for such a step. But what is "free swimming" and how this can affect the material welfare of the common man today? In simple terms, this situation happens in the foreign exchange market, when the state simply ceases to regulate the exchange rate by currency interventions. That is, the government does nothing if the national currency starts to fall. The departure of the ruble in Free navigation is a risk to the Russian economy, but, according to most analysts, the development of such a situation in the near future is simply inevitable.

Reasons for the fall of the ruble

Why does the Central Bank lower the ruble in free float? In fact, there can be many reasons for such a decision, but the main thing is that the regulator is no longer able to maintain the national currency in the required amount. As you know, the ruble completely lost its positions at the end of 2014. Fortunately, most of the population managed to prepare for the fact that they will have to relive the economic crisis. It is worth noting that in our country such collapse happens with an enviable frequency, and most of the citizens of Russia are already accustomed to such dramatic changes in the financial market. The behavior of the ruble was significantly influenced by the geopolitical situation in the world, which only cost Russia the accession of the Crimea and the conflict in the east of Ukraine. Sanctions that were applied in response to these actions were the main cause of the crisis this year. Also, do not forget that for our state is extremely important price of oil, which also fell last year, almost twice.

To whom is it profitable?

Why does the CBR reduce the ruble's exchange rate and what does it threaten? It is quite clear that with such a development of events, the cost of most goods in our country will increase dramatically, and all this will have an extremely negative impact on the financial position of average Russian citizens. What threatens the combined ruble floating of ordinary people? At least the fact that even more expensive items of basic necessity. Given that the financial situation of most Russians is completely unenviable, it can be assumed that another economic collapse will be a real disaster for them. At the same time, the state itself is profitable enough to keep the ruble at the lowest possible levels. Everyone knows such a thing as export. More often than not, Russia exports energy resources and armament, for which it receives, in fact, a huge amount of foreign currency, because, as is known today, trade between states is calculated in dollars. So it turns out that while ordinary citizens are trying to learn how to live at a disadvantageous rate, the state earns the maximum in export, because all company expenses are calculated by cheap Russian ruble.

What threatens the ruble with freedom?

What can happen to the national currency, if today it goes into free swimming? First of all, of course, the market will become simply uncontrolled, which means that again there will be a huge number of speculators who will want to earn. At the same time, the state will not be able to do anything at all, and ordinary citizens will receive not only lower wages, but also social benefits, for example, pensions and benefits. Visually, the number of payments, of course, will remain at the same level, but let Russians afford much less for this money. In general, the economy of our state is profitable enough for what is happening today with the national currency, and the owners of exporting companies are unlikely to be asked by the question: "What threatens the ruble with free navigation and how this can affect the population?" The faster the domestic economy begins to recover, the The national currency will also become stronger, so ordinary citizens simply do not have a choice but to learn to live in new conditions. As it is typical for our country, is not it?

The beginning of 2015. Why did the ruble get stronger?

Despite the fact that most experts were confident that the national currency will be at low levels for several years, the situation changed dramatically by the beginning of 2015. Ruble learns to dive, leaving for free swimming, experts have found, but in fact everything turned out a little differently. In fact, the national currency of Russia is not yet ready to grow on its own, and the reason for such a sharp jump was the rise in price of oil. Black gold really began to grow in price, and this was the main reason that the domestic ruble began to grow stronger. But this does not mean that this will continue in the future. At the moment, experts argue that the ruble is almost independent of oil, and black gold, in turn, has so far stopped at certain levels. This means that so far the situation in the foreign exchange market will remain extremely stable, but how long will this last?

What is needed to avoid the "free float" of the ruble?

With what the ruble is threatening free swimming, it has already turned out, but can this be avoided today? Experts recommend that Russians do not panic or try, as at the end of 2014, to buy up foreign currency for all savings. All that needs to be done to the state in order to avoid such a situation is to normalize all economic indicators. In words everything sounds simple enough, but it's quite difficult to realize it. A few months ago, many analysts believed that the abolition of European sanctions would help Russia stabilize. But everything turned out to be extremely negative, and today Russia itself has extended its restrictions towards European states. All this complicates the situation in the currency market as much as possible and weakens the ruble's position, of course. Russians should be prepared for the fact that the Central Bank will adhere to its previous position and decide to let the ruble float freely.

What should investors do?

Investors also understand today what the free floating of the ruble is threatening, therefore they try to prepare as much as possible for this event. Professionals have already managed to send their savings to the most profitable financial directions, for example, experts recommend drawing investors' attention to securities of Russian companies, which will soon show positive dynamics in the near future. And such financial instruments as an investment deposit or a deposit of securities will help investors not only to earn, but also not to waste time managing their assets. However, it is worth noting that working with securities requires certain skills and knowledge. Therefore, it would be superfluous for newcomers to seek help from management companies or give preference to Mutual Funds. Recently, the market of precious metals has not badly shown itself. The only place where it is risky and unprofitable today to keep your savings - these are banks that, against the background of lowering the key rate, are simply losing their attractiveness just before their eyes. After all, it was the bank deposits that first felt what could free the ruble floating.

What will happen to the ruble in 2015-2016?

While experts are in no hurry to assume what will happen to the Russian ruble in the next few years. The situation is really almost unpredictable, because there are too many factors on which the economy of our country will depend. Most importantly, both investors and ordinary citizens of Russia understand perfectly well what the free floating of the ruble is threatening, and therefore they are already actively preparing to avoid becoming the victims of another economic collapse. At the same time, analysts especially stress the importance of the geopolitical situation and the crisis in the black gold market. What will happen to the ruble if the Central Bank lets him go free swimming? Russia will again face a severe economic crisis, which, most likely, will last several years. In any case, it is not necessary for the citizens of our country to expect that the ruble will quickly restore its positions.