Investing in currencies today: do I have to?

The ruble is categorically refusing to fall, and most experts, quite reasonably in my opinion, see certain risks for the Russian economy in this. First of all, let's look at the general picture of what is happening, and then let's try to understand what we can do with our money in this situation.

16.09 The Russian Central Bank lowered its key rate to 7.5%. The decision was quite expected. Recall, according to the Central Bank's baseline scenario, it should remain in the range of 6.5 - 8.5% in 2023. Thus, we are just now seeing the equilibrium value of the rate. As a consequence, if we should expect it to continue decreasing, it is unlikely that this reduction will be very strong.

By the way, along with the baseline scenario, the Central Bank also published a scenario called "Global Crisis," in which it told us all the following: . The prudent Central Bank, of course, did not predict the interest rate trajectory for this scenario, limiting itself to

reacted rather weakly to the decision of the Bank of Russia. The exchange rate now reacts little to anything other than geopolitical news. It is clear that against the background of rumors about the possibility of Russia's use of nuclear weapons any decisions of any Central Bank so far pale. Just as the correlation between the ruble and the price of energy fades, by the way. The imbalance is complete.

It is important to understand and accept the fact that imbalance is essentially just a transitional stage in the formation of a new economic model. When the old rules of the game do not work and new ones have not yet been invented, imbalances are quite normal.

However, what can we rely on when predicting further USD/RUB behavior? So far, in my opinion, there can be only one support - the geopolitical situation. The reaction of USD/RUB will not be to an increase in the rates of the Central Bank of Russia or the USA, but to an increase in the rates in the geopolitical game.

The chances of de-escalation are not very high right now. The results of the referendums have not been recognized anywhere, and new sanctions have been imposed. And now experts are already announcing the imposition of possible restrictive measures on the NFP and, as a consequence, the blocking of exchange transactions with dollars and euros. It is clear that a number of market participants, avoiding risks, can now get rid of USD. In other words, the dollar and euro are becoming more and more "toxic" currencies. The ruble does not have much to devalue.

Thus, the general recommendations to work with currency are the same as in our previous article: if you have a currency deposit, you should not close it, but you should not buy more currency, because it increases the currency risks. As to the issue of foreign exchange positions, here, in my opinion, you should act according to the situation. With the imposition of sanctions on NCC, the transactions will be possible on OTC, but here the issue of liquidity and, accordingly, transaction costs may come to the fore. At the moment one thing is clear: investment and speculative opportunities to conduct operations with foreign currency of "unfriendly" countries in the Russian market continue to narrow and one should think whether it is necessary to do it at all?