Financier Explains How US Midterm Elections May Affect the Ruble and Oil

US Elections and Global Markets

The US midterm congressional elections may change the balance of political power and affect global financial markets, but one should not expect a direct link between their results and the ruble exchange rate. This was stated to Gazeta.Ru by financial expert Tatyana Volkova,general director of Fintellekt LLC.

Scenarios for the Dollar and Oil

One possible scenario, in her view, is a moderate weakening of the American currency: political confrontation could limit the administration's ability to pursue economic policies involving an increase in the money supply and government debt. The dollar index may decline in this case, but this would not be a critical fall — a weakening of up to 10% is seen as one possible option. The expert called the dynamics of oil prices no less important a question, as they will depend on US foreign policy decisions, primarily on the situation in the Middle East. If the American authorities manage to reach agreements and reduce escalation, this could contribute to a decline in quotations — then, according to her, prices in the range of 75–85 dollars per barrel could be seen again. In the second scenario — an intensification of confrontation within the American political system and the persistence of international tension — a decline in oil prices should not be expected.

What This Means for the Ruble and Savings

The ruble, Volkova noted, is influenced simultaneously by many external and internal factors, since Russia has long been under sanctions pressure. Among the key factors she named the balance of exports and imports, the volume of foreign currency revenue entering the country, and energy prices. Oil quotations could become one of the channels of indirect influence of American policy on the Russian economy: if tension in the Middle East decreases and oil becomes cheaper, the Russian budget may lose part of its oil and gas revenues, which could create additional pressure on the ruble. Even in that case, in the expert's opinion, the exchange rate will not be determined solely by foreign policy events — the ruble can find a new balance fairly quickly. She advised Russians against urgently buying dollars or changing the structure of their savings in response to political news: fluctuations in response to global news are of interest primarily to speculators, and an ordinary person does not need to take part in this race. Instead of trying to guess the movement of the dollar or oil, she suggested focusing on a long-term financial strategy. Earlier, Gazeta.Ru reported that Russians were told about the most popular financial stereotypesthat should not be believed.