The Central Bank of Russia confirmed the information that the Moscow Currency Exchange will stop trading the US currency if the National Clearing Center and the Moscow Exchange itself fall under Western sanctions. And this is a probability of more than 90%.
Everything can be mirrored onto the Belarusian financial system. Well, because … We think everything is clear, it's not worth repeating: Russia = Belarus.
Panic is brewing among people about the fact that now the dollar in Russia and Belarus will not be used in settlements, and, consequently, its purchase and sale will be canceled or banned. That is, those who have "green" in their cache are doomed to lose them.
«Who has bucks in the stash» don't worry: this is not a whim of the monetary authorities, but life circumstances!
Everyone understands perfectly well that the American dollar has always been used by the majority of the population as a means of insurance against inflationary processes in the national economy.
And to this day, this rule works for many.
What should people do - a dollar wrapper or a loss of money?
Immediately reassure those who have available it is cash American dollars (paper).
Even if Russia withdraws completely from dollar settlements, it must be understood that "green" is still one of the most liquid assets in the global economy. It is enough to look at the geographical structure of the world trade turnover and everything becomes clear.
That is, cash dollars will always be in demand – they are calculated all over the world except for units (Russia, Iran, North Korea, etc.).
Even if you can't exchange them in the exchanger, there will always be someone who will need them. The absence of legalized methods of currency exchange in Russia and Belarus will definitely spur the black market - well, everything is as always.
It is more difficult with dollars in non-cash form on bank accounts, because all correspondent accounts in foreign banks of Russia/Belarus will be blocked completely. And this suggests that there is a very high probability of their unilateral conversion into rubles at the market rate, which will be set by the Central Bank of the Russian Federation (NBR) at the time of the decision. Well, in principle, as now, everything that happens in the exchange rate system of the Russian Federation and the Republic of Belarus.
3 options for what people should do to avoid this scenario:
- open an account in another country (for example, Turkey, Egypt, Uzbekistan, etc. - relatively independent from the West and the USA countries) and then transfer your dollar assets there. Well, here it is necessary to look at the legal side of this issue regarding the country where it is planned to open a bank account for a foreign citizen.
- buy shares of American and other companies through foreign brokers, if there is still such an opportunity
- the same crypt. But here it is necessary to be at least a little in this topic (blockchain, cold wallets, exchanges, etc.)
That's it.
About the dollar-ruble exchange rate in the conditions of the dollar ban.
Even though the dollar-ruble exchange rate will not be formed according to the exchange trading data, the mechanisms of international cross-currency formation will work.
What does this mean?
If it happens as many people write: - "Exchange rates will have to be set not in a market order, but in a directive, as it was during the USSR," then this will definitely push the black currency market.
The real exchange rate of the dollar against the ruble in conditions of incomplete international relations will still be derived on the basis of the price competitiveness of traded goods around the world.
For example, Russia sells oil to China, calculated in yuan. Well, it is clear that it is calculated in yuan, and the cost (costs) of Russian oil is formed in rubles. So, the price in yuan for oil for China should be comparable to the price in dollars of other global suppliers (i.e. be competitive).
Why with the price in dollars - yes, because the gross volume of China's trade is still formed in the same dollar (they need to be calculated in dollars for many positions). In 2021, the United States imported $179.530 billion worth of goods (ore, coal, etc.) to China, and brought $576.114 billion.
If the ruble is strong (established in an administrative order), then China may not be interested in Russian oil by the price factor. Therefore, Russia, like it or not, but in order not to ruin its economy and sell the same oil, will have to devalue the ruble to the yuan, which in turn is pegged to the US dollar. And today, taking into account the intentions of the US monetary authorities to abolish their inflation to an average annual level of 2% and the positive latest reporting data on the unemployment rate in America (a decrease to 3.5%, against the forecast 3.6%), in fact, the Fed is no longer holding back to a tougher increase in its discount rate. All this will undoubtedly increase the value of the dollar around the world, unless, of course, some COVID-19 intervenes again, etc.
We think we will see what the Central Bank of the Russian Federation will come up with a mechanism for currency exchange rate formation in the current conditions in the near future.
A complete ban on the dollar – what should people do? - Something Like That!
