RUSSIANS GET RID OF DOLLARS
According to the Central Bank, in the first half of 2006 alone, dollar assets of the population decreased $5.1 billion, which was 200% more than in the same period of 2005. Experts say that there is nothing surprising in the overwhelming depreciation of US currency. Rouble appreciation and negative profitability of dollar deposits will only contribute to further loss of interest of the population in formerly the most popular currency.
The Duma deputies who passed a bill aimed at de-dollarization of the Russian economy in spring 2006 may be happy. According to the Central Bank, striving of the population for investment of savings in dollar assets is gradually disappearing.
Whereas in the first half of 2005, sales of dollars by the population amounted to $1.7 billion, in the same period of 2006, they grew threefold. Senior Deputy Chair of the Central Bank Alexei Ulyukaev states, “This is a positive phenomenon for the economy. It is controllable and does not lead to disastrous results.”
Experts did not see anything surprising in the fact that in the first six months of 2006 alone, population got rid of $5.1 billion. First, dollar depreciation against rouble is outlined by the future financial plan. Second, dollar depreciation results in unstopping decrease of profitability of deposits in American currency.
Anton Struchenevsky, analyst of Troika Dialog Investment Company, remarks that rouble is getting appreciated against the background of dollar depreciation against euro and only after that it is possible to speak about dollar depreciation against the rouble. Besides, high speed of economic growth and financial stability contribute to confidence of the population in the financial system. Deputy CEO of Russian Bank for Development, Yevgeny Temyakov, adds that the trend of de-dollarization also shows that confidence in the Russian economy is returning to the population and fear of crisis appearance is disappearing. Temyakov also says, “Dollar ceases being the currency used as an insurance deposit and it is possible only to welcome this fact.” According to the expert, decrease of dollar savings of the population will continue at least for two years more. A reverse trend may be provoked either economicly or political instability in the country, says Temyakov, or interest rates on deposits in US dollars higher than interest rates on deposits in roubles.”
At any rate, this will hardly happen in the near future. Thus, according to the macroeconomic research center of BDO Unicon, in July, banking deposits in dollars demonstrated negative real profitability again varying from – 1.16% to – 0.89% depending on the term of deposit (the data is based on results of analysis of activities of the 15 leading banks). Thus, experts said that since the beginning of the year purchasing power of one-year deposits in dollars decreased 9.25%. Struchenevsky adds referring to data of his company that the population has started trusting more and investing rouble savings in shares of various share investment funds.
Vladimir Skvortsov, Vice President of Alfa-Strakhovanie group, predicts that the population will keep getting rid of dollars. Along with this, the expert believes that now this is not a very positive trend because it will contribute to further dollar depreciation against rouble and, as a consequence, to reduction of competitiveness of Russian manufacturers both on foreign and domestic markets.
<ref>Biznes, August 28, 2006
