Against the background of sanctions pressure, restrictions on export-import operations, it was logical and predictable to expect a serious devaluation of the Belarusian ruble in order to maintain the country's positive balance of payments and the work of the economy at least within a small average annual GDP growth of 1-3% (so to speak, to maintain rhythm).
But the opposite is happening. Why is it so and is it good for the economy and ordinary people ?
There is Belarus, and there is Russia. Both countries have their own debt portfolio, as well as trade and balance of payments, provided by what they sell and spend, how much and where.
So, against the background of the fact that there was a serious shortage of hydrocarbons in the world, and OPEC in no way affected the situation of expanding the production of raw materials, the West and the rest of the world could not refuse, within the framework of the embargo imposed, from Russian gas and oil.
As a result, what we have.
Taking into account the high dollar inflation «green » (8.3% average annual level as of 11.04.2022) and the shortage of hydrocarbons, Russia has comfortable foreign exchange earnings from their sale (even to those who imposed this «embargo »). At the same time, imports are almost completely limited, i.e. no one is in demand for these petrodollars from the real sector. A significant surplus of the balance of payments contributes to the logical strengthening of the Russian ruble, and after it, in relation to the currency basket, the Belarusian ruble has the same tendency, although there are no factors for "proteins" for this (unlike Russia).
The scenario is very high-risk for the eastern neighbor, but so far favorable. It is necessary to understand that a change in the epidemiological situation or climatic conditions in the world (warm/cold) can turn everything upside down at one moment.
Can the current exchange rate of the Russian and Belarusian rubles be considered market ?
Probably not! Because Russia does not yet have full-fledged market trade relations. Only the oil and gas industry works in full and then in one direction.
All other sectors of the industry are simply trying to solve their problems through India and China, or I work for a warehouse or even reduce the pace.
Friendship is friendship, and business is business or why strengthening the national currency is bad for the national economy!
Each state has its own economic problems and they all solve them in different ways.
Americans are still unable to curb inflation, raising their discount rate to 0.75 -1 percentage points for the second time in a year and selling their government bonds. Apparently, this does not solve the problem. There are too many bucks spinning in the world that they only provide price growth, which the Fed wants to bring down, focusing on the level of American unemployment. Nevertheless, it is still economically profitable for American exports, which does not drive the American authorities backwards.
Although India and China are expanding their trade turnover with Russia (increased by 20% over the past month), they still remain loyal to the existing markets of the United States and the West, devaluing their national currency (by 2% last month) to support their exports.
This suggests that it will be more expensive for China to buy in the Russian Federation and the Republic of Belarus, and even more so in the conditions of strengthening their national currencies. In such circumstances, the Eastern partners will look for an alternative, and most likely in the USA and the EU, where it is cheaper.
Strengthening its national unit of account, Russia will inevitably face the problem of selling its national surpluses (when the domestic market is oversaturated) to the same China and India, which have their own economic problems and approaches to solving them.
Taking into account the structure of world GDP and the fact that trade relations will remain in any case (in the conditions of one country having some material goods and the absence of others, while others have the opposite), the monetary policy of each state will play a decisive role in the system of these relationships, determining the level of competitiveness of its products relative to the other world.
The Russian payment surplus is provided by its raw material base, and the Belarusian one by what?
One can only assume that in the conditions of its independence, Belarus, under the current conditions, is very willing to get rid of the current exchange rate system (where more than 50% of the basket is tied to the Russian ruble) to maintain its economy, working even in conditions of "dark" exports and imports. Why the National Bank of the Republic of Belarus does not go for it, one can only guess?!
Unfortunately, the political scenario is still working with its own ambitions and attempts to prove something to someone, and not an economic one based on market principles.
Given the current trend of the exchange rate system, in the future, this whole situation may lead to a loss of the real sector of the economy and a general drop in GDP (mainly related to exports). This, in turn, may affect other industries, given the system of fiscal and trade relations within the country.
If not today, then tomorrow, trade will recover - not through direct, but through parallel imports and exports.
All market players have always had and will continue to have relations based on the principles of price competitiveness, which directly depends on the value of the currency in which their final product is produced.
What are the future prospects for the exchange rate of both the Russian and Belarusian rubles, evaluate for yourself.
One thing can be said that in order to restore GDP, the monetary authorities may have to use shock therapy tools in the near future. As they say - quickly and painlessly.
The strengthening of the ruble - why is this happening and why is it bad for the national economy - Somehow So!