Dollar's Potential Increase Discussed by Expert: Predictions Above Br3
The National Bank of Belarus announced last week that the exchange rate for the American dollar surpassed Br3, a significant milestone in the country's currency market. This rise can be attributed to a variety of factors, most notably the so-called Trump factor.
The Trump factor refers to the influence of President Donald Trump's administration on the global economy, particularly through trade policies and foreign relations. Trump's America-first stance and protectionist measures have created upward pressure on the US dollar relative to currencies like the Belarusian ruble.
Trump's administration's trade policies aim to keep the US dollar strong by discouraging rival currencies or economic blocs, including BRICS, from supplanting the US dollar in international trade. Additionally, Trump's engagement with Belarus—including diplomatic visits by his envoy Keith Kellogg and attempts to normalize relations—have created some hope for easing sanctions and improving bilateral ties. Such diplomatic thawing could potentially stabilize or improve Belarus’s economic outlook, indirectly affecting the BYN positively.
However, the Belarusian ruble's value is also influenced by broader regional factors such as Russia's economic policies and inflation. For instance, Russia’s central bank rate cuts and economic slowdown could affect Belarus’s economy through close ties, indirectly impacting the BYN’s exchange rate.
Economists warn against buying dollars for speculative purposes, emphasizing the importance of accumulating funds for the long term and diversifying them. The Eurasian Bank for Reconstruction and Development (EABR) revised and lowered its forecast for the average annual exchange rate in Belarus, predicting it to be Br3.28 by 2025. This suggests a potential rise of the dollar to Br3.38-3.40 in the coming months to reach the EABR's suggested level.
The expert notes that the world of finance doesn't tolerate haste, and advises against making hasty decisions based on short-term fluctuations in the exchange rate. Instead, it's advisable to buy foreign currency when there's no hysteria or for specific purposes related to its necessity.
In recent weeks, there may be increased volatility in the dollar-to-ruble exchange rate (and other currencies) due to Trump's statements. This volatility underscores the need for careful consideration and strategic planning when making financial decisions.
The dollar maintains popularity among the Belarusian population due to inertia, but it's important to stay informed about the latest developments in the global economy and Belarus's currency market to make informed decisions. Most trading on the Belarusian exchange now occurs with Russia and China, and the expert believes that the Belarusian ruble typically follows the Russian one. However, the ruble strengthened against all currencies during some days in July, indicating a more complex relationship between the two currencies.
The euro weakened due to Europeans signing a disadvantageous deal on tariffs under US pressure, according to the expert. This highlights the interconnectedness of global economies and the need for a nuanced understanding of the factors influencing currency markets.
In summary, Trump's policies tend to strengthen the US dollar against the Belarusian ruble by reinforcing USD dominance and applying economic pressure on competitors. Concurrently, his diplomatic efforts aimed at Belarus may offer some countervailing effect by potentially improving Belarus’s economic conditions if sanctions are lifted or eased. This dynamic creates a nuanced outlook for the USD/BYN exchange rate by 2025, balancing strong USD fundamentals under Trump with political developments in Belarus.
The Trump factor, stemming from President Donald Trump's administration, influences not only the global economy but also the exchange rates of currencies like the Belarusian ruble, as his administration's trade policies aim to keep the US dollar strong, thereby creating upward pressure on the US dollar relative to currencies like the Belarusian ruble.
Economic experts recommend avoiding speculative purchases of dollars and focus on long-term fund accumulation and diversification, while also staying informed about the latest developments in the global economy and Belarus's currency market to make informed decisions.
