Residents of Russia are closely monitoring changes in the bi-currency basket (even those who do not have foreign exchange savings), because they understand how much their life is associated with these two indicators. But economics, unfortunately, is not algebra and geometry: there is no clear and unambiguous answer. The strange thing is that the ruble is falling against the euro only. To the dollar, since the month of July, our national currency grew by 1.5-2%.
Who is loosening the deck?
When asked why the euro is growing, and the dollar is falling against the ruble, the answer is simple. Even the laziest could not fail to notice from news reports that the great power in the person of the United States has put so much effort that it is surprising not only that the course is falling, but how slowly this is happening. But why the euro is growing (2013), perhaps the American situation will not give an answer.
In connection with Russia's entry into the WTO, the high ruble exchange rate for the Russians themselves will be a tragedy. But an expensive euro is also unprofitable for the Russian consumer basket. As practice shows, our population likes to buy imported goods at a low price. And it seems beneficial at first glance. Indeed, many imported goods are much cheaper than local ones due to low export duties. Therefore, importers will benefit from the high exchange rate of the national currency, filling up the country with cheap foreign goods. And what the domestic manufacturer produces will remain in warehouses.
Where it leads?
Enterprises, our partners, will begin to close. Or our own factories, having lost the competition with cheaper and higher-quality imported goods, will also close. A rhetorical question arises: "To whom to give loans, to whom to build houses?"
Reasonable economic protectionism has always been beneficial for a country that uses its own producer’s protection tool. Therefore, the state, to the best of its ability, maintains a low ruble exchange rate so that the economy does not collapse.
Moody currency
Simply put, the answer to the question: "Why is the euro growing?" extremely simple. EU countries artificially inflate the exchange rate so that their own economy does not collapse during the crisis. The name of this phenomenon is devaluation. Most likely, maintaining our ruble exchange rate is expensive for our Central Bank, but everyone knew what Russia's entry into the WTO would cost. Recently, oil prices have stabilized, there are no sharp jumps in dynamics - this is an obvious plus. But such fluctuations also affect why the euro is growing.
If we go from the opposite point of view, a strong Euro currency is not so beneficial to the Eurozone itself, for the same reason that we do not need a high ruble exchange rate. And then it becomes not entirely clear why our civilized neighbors are not taking action. The only currency that behaves predictably is the pound sterling - it is growing slowly in relation to all currencies. Now it’s clear why the far-sighted British did not want to exchange their pounds for the euro.
Why is the euro growing slowly?
This is facilitated by the growth of public debt in Germany, the main donor of the Eurozone. Plus, the main euroclaw of the Eurozone is France. The state simply raised taxes (everyone remembers how Gerard Depardieu became a Mordovian farmer?). A control shot was the increase in VAT in Italy (up to 22%). In hot Italy, not all people are as patient as the Russians. Recall that in the economic history of Russia, VAT was applied simultaneously - 20% and sales tax - 5% (total 25%). The ingenuity of Russian bankers sometimes surpasses the Jewish one, since by 25% they decided to indirectly wind another 1%. In fact, we did better, since at first VAT was added to the price (20%), and sales tax was calculated on the resulting amount - (5%), and instead of the pure 25 percent we paid 26%.
The neighbors also suffered
But the question of why the euro is rising does not arise only in Russia. The Ukrainian hryvnia also feels a negative trend for itself. This was influenced by the statement by the head of the Fed (US Federal Reserve System) Ben Bernanke that measures to stimulate the dollar are being postponed to November-December. And the lever that lowered the dollar and at the same time played to increase the euro was the rise in gold prices (3.5%).
It is worth remembering that economic laws are a combination of factors affecting the world market, and one of them will never be decisive for global changes. It remains only to observe the further development of events in the economy and in the world.