Analyst: the pressure on the ruble may rise

pressure on the Russian currency may temporarily increase after Friday’s reduction in the key rate of the Central Bank of the Russian Federation from 1 percentage point to 4.5% per annum, says the economist “BCS Premier” Anton Pokatovich.

He expects that “the ruble will be formed in the range of 69.5-71 rubles per dollar.” “Support for the ruble currency will continue to provide the tax period. At the same time, we can see that the risk of lowering the level of optimism in global market sentiment remain, how are risks and return of oil prices to moderate correction. Also consider that after Friday’s reduction in the key rate pressure on the ruble currency on time may increase,” — said in the review of the expert.

overall, he predicts the preservation of “the ruble inclination to restrained the weakening in the future” this week.

for his part, the chief of Department of the analysis of banks and money market IK “VELES Capital” Yuri Kravchenko says that “last Friday, a major factor for the strengthening of the ruble was the growth of prices on oil”. “In the course of trading Brent crude was close to around $ 43 per barrel, updating the maximum for the last two weeks. Also, apparently, some of the exporters have already started to convert foreign exchange earnings in preparation for tax payments in the domestic market on 25 June,” — said the expert.

At the same time, he estimated that “the decision of the Bank of Russia to reduce the key rate of the ruble responded neutrally: in the first minutes after the rate cut there was a slight weakening of the ruble, but also fast, the Russian currency has recovered its position”.

However, emphasizes IAC senior analyst “Alpari” Anna Bodrov, the market is “all rejoice in the fact that CBR is doing something”. At the same time, the expert warns, “the ability of the ruble to rise is limited and the current deficit byjet and situation, and the imminent return of imports in the same stream.”

moreover, experts on the stock market “BCS” Dmitry Babin, “in the medium term such a low level of the key rate can act as one of the factors weakening of the ruble, as too cheap liquidity supports demand for foreign currency, especially in times of market instability.”

we also Recall that the Russian national currency since the beginning of this year has significantly depreciated against the dollar and the Euro. Strong pressure on the rouble had a General panic in the financial markets due to the rapid spread of the pandemic coronavirus infection COVID-19 and concerns about its impact on the global economy, and a collapse in oil prices.

So, the strong devaluation of the Russian currency occurred on March 7 on the international Forex market, after the day before the deal collapsed OPEC+, — countries of the Alliance are unable to agree on cutting oil production, nor of the extension of the deal for a longer period (1 April 2020). Then, on March 9, 2020, the financial and oil markets suffered “black Monday”, and on 18 March, the market embraced a “black Wednesday” with yet another collapse of oil prices, the Russian national currency in the course of trading on the Moscow stock exchange has updated (at the time) a record low against the dollar and Euro since February of 2016, 81 and 88 million, respectively.

we Add that the real effective exchange rate of the ruble (inflation-adjusted) in may 2020 rose by 3.8% against foreign currencies relative to the previous month. In this case the real rate of the ruble against the dollar rose during this period by 4.7%, to Euro — on 3,8%. However, for the first 5 months of the current year the real effective exchange rate of the ruble fell by 7.8%, and the dollar — by 9.9%, and the Euro by 9.7%.

On Monday the Bank of Russia has set the official exchange rate of the U.S. dollar at 69,5725 ruble, Euro — ruble 78,0047.

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