MOSCOW, January 14. / TASS /. The ruble in 2021 will strengthen to a fundamentally justified level of 65-70 rubles to the US dollar, according to forecasts in Credit Suisse’s new economic survey released on Thursday.

“We expect the ruble to return to its fundamentally healthy level in 2021. In our opinion, its weakness was caused by temporary factors,” bank experts say. The reason for the weakness of the national currency was a combination of several factors, they explained. Among them – the intention of the Russian government to revise tax agreements with offshore countries, as well as a sharp increase in the money supply (the growth of monetary and non-monetary (M2) funds from early 2020 to October accelerated from 10.2% to 16.2% year-on-year). The pause in easing monetary policy that began in September 2020 has also had a negative impact on the Russian currency, the company added.

“The first factor provoked an outflow of capital, and the second created favorable conditions for this outflow,” the bank noted, adding that the main sources of the increase in the money supply were the operations of the federal budget and the specificities of the financing of the deficit in Q2, when the State benefited from the privatization of Sberbank (about 1% of GDP). “Instead of offsetting this increase in ruble liquidity with currency sales, the Central Bank of Russia postponed its free market operations until the fourth quarter, also offsetting them with currency purchases postponed from 2018. In our opinion, this created an additional imbalance in the local forex market. In our opinion, this imbalance was temporary and will disappear in 2021, ”Credit Suisse said in its survey.

The pause in easing monetary policy that began in September 2020 has also had an additional negative impact on the Russian currency, the company added.