Sberbank CIB named exhausted the effect of the devaluation of the ruble


The slowdown in average inflation from 0.031 inch% in January to 0,021% in February 2016 suggests that the weak ruble has ceased to spur inflation, according to the report of analysts of Sberbank CIB.

“We believe that the effect of the devaluation of the ruble have either been exhausted, or cease to be felt in the near future. Our view is reinforced by the deflation in important segments of the food commodities in February,” the document says.

Experts note that the ruble is currently in “free swimming and is close to the equilibrium state”, but the status is unstable because of inflation persists at a high compared to developed countries. However, in the case of new growth in oil prices, the experts of Sberbank CIB are waiting for a new appreciation of the ruble.

Inflation, according to them, 2016 will be approximately 8%.

“The slowdown in inflation will provide the Bank of Russia additional opportunities to reduce interest rates and this will push the Finance Ministry to Finance the budget deficit by increasing the volume of bonds placement and not just from the Reserve Fund”, — underlined in the document.

Experts remind that sale of currency from Reserve Fund provide a flow of cheap liquidity in the banking system, which slows down the process of slowing inflation. In this situation, could help the growth of oil prices, which increases the oil and gas revenues. On the whole Russian economy to the present level of oil prices, according to analysts, have adapted.

“Overall the economy is, apparently, already adapted to oil prices at $30-35 per barrel, and it is possible to expect positive dynamics of the GDP by 2017. If the average oil price for the year falls below $30 per barrel, in the second half, may even start some recovery of domestic demand”, — the document says.

During today’s trading on the stock exchange ICE cost of a barrel of Brent crude oil fluctuating between $41 and $42.

But the real wages of Russians, according to experts, Sberbank CIB, in 2016 will continue to decline as inflation slows down slowly and nominal wages are rising more slowly.

“In 2015, nominal wage increased by 4.6%, while in January of this year growth slowed to 3.1% compared to the same period last year. Therefore, if the growth of nominal wages will not accelerate to 8%, inflation will keep the dynamics of real wages in a negative region”, — stated in the report.