On Monday, October 7, at the Moscow Exchange, the Russian currency is moderately weakening. The US dollar rose by 0.47% to 64.9 rubles, while the euro rose by 0.4% to 71.2 rubles.
The official exchange rate of the Central Bank on October 8 was 64.82 rubles per dollar and 71.14 rubles per euro.
The ruble is adjusted after strengthening at previous auctions. So, on Friday, the dollar fell to 64.5 rubles, and the euro - to 70.8 rubles.
“The national currency has risen in price on Friday, so at the auction on Monday it is losing ground. But in the medium term, the ruble will move in the direction of strengthening along with the most profitable currencies of developing economies, ”said Pyotr Pushkaryov, chief analyst at TeleTrade, in a conversation with RT.
Over the past few weeks, global investors have begun to invest more in risky securities and currencies. The reason for this behavior of market players was the actions of central banks in China and Europe. About this in an interview with RT told the analyst of the management of operations in the Russian stock market IC "Freedom Finance" Alexander Osin.
“A positive factor for the ruble exchange rate and emerging markets as a whole is the intensification of monetary stimulus in the PRC in September and a quantitative weakening in the eurozone, which is scheduled to start in November 2019,” Osin explained.
In September, the People’s Bank of China lowered the reserve ratio in the country. Such a measure should increase lending and strengthen business activity in China. At the same time, the European Central Bank promised to resume the quantitative easing program from November 1. The ECB intends to turn on the printing press and buy up government bonds of eurozone countries with the money issued. The actions of the regulator can lead to an increase in the money supply in the region, as well as accelerate inflation.
Analysts believe that central bank measures should protect the economies of the EU and China from a sharp slowdown.
High stakes
In the near future, the ruble will support a slowdown in inflation in Russia, said Alexander Osin. Thus, a decrease in consumer price growth may support the demand for ruble bonds of the federal loan (OFZ).
According to the latest data from Rosstat, in September consumer prices in Russia increased by 4% compared to the same period in 2018. Thus, the indicator has already reached the target level of the Central Bank. Moreover, in October, the value may fall below the target of the Central Bank - to the level of 3.7-3.8%. This is stated in the review of the Ministry of Economic Development.
Slowing inflation may also affect Central Bank policy. So, earlier the first deputy chairman of the Central Bank, Ksenia Yudaeva, did not rule out a reduction in the key rate.
“We will consider various effects, but we see a certain space for a further reduction in the rate,” Yudaeva emphasized.
Since the beginning of the year, the Bank of Russia has already lowered its key rate three times - from 7.75% to 7% per annum. At the same time, interest rates in Europe and the USA are also falling and remain noticeably lower than in Russia. According to Peter Pushkaryov, this situation strengthens attractively Russian government bonds for investors.
“Due to the relatively high interest rate of the Central Bank, a high yield for holders of government bonds remains. For securities of the Ministry of Finance with a maturity of ten years, investors receive a “premium” of 6.9% per annum. This looks extremely advantageous against the background of the practically no noticeable profit from dollar investments in US treasury bonds or even negative rates on guaranteed securities in euros, ”explained Pyotr Pushkaryov.
- © Natalya Seliverstova / RIA News
Memory movement
Interviewed RT analysts added that the dynamics of the ruble will to some extent depend on changes in oil prices. According to the ICE exchange in London, today the cost of raw materials of the reference brand Brent is trading near the level of $ 58-59 per barrel. At the same time, experts predict the growth of quotations before the end of the year.
“Despite the slowdown in the global economy, the policies of the countries participating in the OPEC + agreement support oil prices. The situation in the short term looks relatively balanced, there is still the possibility of rising oil prices by the middle of next year. Until the end of 2019, prices may reach $ 60-63 per barrel, ”said Alexander Osin.
Rising oil prices may support the national currency in the fall, but at the same time, the impact of commodity quotes on the ruble will be limited by the budget rule. It provides that during the growth of commodity quotes, the Ministry of Finance buys foreign currency and thereby puts pressure on the ruble. Moreover, in the event of a collapse of the energy market, the ministry ceases operations and pressure on the ruble weakens. As a result of such actions, the dependence of the national currency on oil is reduced.
Recently, the effect of the fiscal rule has weakened the relationship between the ruble and oil, but currency market players still sometimes react to changes in commodity prices due to habit. This was told in an interview with RT by the director general of IK Oriole Capital Andrei Khokhrin.
“The ruble will react to oil because of the historical memory of the market: players remember that when the commodity quotes fell, the ruble has traditionally weakened. However, this reaction will be increasingly less linear, ”Khokhrin explained.
Strictly on the course
In general, analysts do not expect a serious weakening of the national currency until the end of autumn. According to the forecast of Alexander Osin, the dollar will remain in the range of 62–66 rubles, the euro - 69–73 rubles.
At the same time, the expected reduction in the US Federal Reserve rate may lead to a weakening of the US currency in the world market. Pyotr Pushkaryov believes that in this case the dollar exchange rate may drop to 60 rubles by the end of the year.
“In the next few weeks, the dollar will be traded within 64.5–66.5 rubles, after which it can roll back to the region of 62.5–63 rubles, and by the end of the year - to around 60 rubles. The euro, respectively, will be below the level of 70 rubles, and will remain there for another six or nine months until the ECB decides to turn off its printing press, ”concluded Pushkaryov.