Currency acceleration: the dollar for the first time since February 2016 exceeded 75 rubles

On Thursday, March 12, the Russian currency shows a weakening on the Moscow Exchange. At the auction, the dollar added more than 3% and for the first time since February 2016 exceeded 75 rubles. During the bidding, the euro exchange rate also grew by 3% - up to 84.7 rubles.

The official exchange rate of the Central Bank on March 13 was 74.03 rubles per dollar and 83.66 rubles per euro.

Negative dynamics are also shown in the Russian stock market. The Moscow Stock Exchange index fell 5% to 2362 points, while the RTS index fell almost 9% to 990 points.

The depreciation of the national currency and Russian securities has been going on since the beginning of the working week. RT analysts interviewed associate negative dynamics with the aggravation of panic in the global financial market. So, since Monday the main stock indexes of the USA, Europe and Asia show a significant drop.

As a result of the Asian session on March 12, the indicator of the Shanghai SSE Composite Exchange fell by 1.52%, and the Japanese Nikkei - by 4.41%. At the same time, during trading on European markets, the French CAC 40 index decreased by 6.38%, the English FTSE 100 - by 6.77%, and the German DAX index - by 6.29%.

On the eve of a sharp collapse of quotations occurred in the US stock market. On March 11, at the auction in the US, the Dow Jones industrial index fell 5.86%, the S&P 500 - 4.89%, and the high-tech NASDAQ - 4.7%.

According to analysts, the news about the coronavirus provoked a panic in the global financial market. On the eve of the World Health Organization (WHO) announced that the outbreak of a new infection in the world has become a pandemic.

“A WHO statement has increased the sale of risky assets. Investors began to panic and actively transfer money to gold for more reliable savings. Such actions of the players provoked a fall in markets and, in particular, a weakening ruble, ”explained Artyom Deev, head of the AMarkets analytical department, in an interview with RT.

According to recent estimates, the total number of coronavirus infected in the world is close to 125 thousand people, of which more than 4.6 thousand died. The most infected people are registered in China (more than 80 thousand people), Italy (over 12 thousand people), Iran (9 thousand), South Korea (more than 7.9 thousand), France (2.3 thousand) and Spain (2.1 thousand).

According to analysts, at the same time pressure on the ruble is exerted by a decline in world oil prices. At Thursday's auction, Brent benchmark crude fell 6.6% to $ 33.56 per barrel. Such data are provided by the ICE exchange in London.

Recall that on Monday, March 9, the cost of raw materials at international sites fell by more than a third and at the moment reached $ 31 per barrel. The collapse of quotations became the largest since 1991. On Tuesday, prices recovered somewhat, but on Wednesday resumed falling.

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The collapse occurred after the two-day negotiations on the OPEC + deal ended in Vienna on March 6, during which the participants could not agree to extend the deal to reduce oil production. Under the terms of the current agreement, which expires on March 31, OPEC + participants, including Russia, reduce production of raw materials by 1.7 million barrels per day compared to the level of October 2018.

After that, Saudi Arabia announced the increase in production to 13 million barrels per day and the provision of record discounts over 20 years to buyers of raw materials from the United States, Northern Europe and Asia. According to Bloomberg, Iraq, Bahrain and the UAE also intend to reduce the cost of their products.

However, amid a significant reduction in oil prices, the OPEC secretariat sent invitations to OPEC + countries on March 12 to participate in the meeting of the alliance's technical committee. About this writes RIA Novosti with reference to the source.

“After the OPEC + participants were unable to agree on an additional reduction in raw material production, the ruble began to weaken. At the same time, the expected return to the negotiating table of key oil powers, including Russia and Saudi Arabia, may restrain further weakening of the national currency, ”said Denis Ikonnikov, QBF portfolio manager in a conversation with RT.

Support measures

Amid the uncertainty surrounding the outbreak of coronavirus and oil prices, the Central Bank has already announced special measures to maintain the ruble. So, from the beginning of the working week, the Bank of Russia began proactive sale of foreign currency in the domestic market.

“It is worth noting that the actions of the Central Bank have already had a positive impact on the ruble. For the third day in a row, the regulator has been selling foreign currency, which helped keep the dollar exchange rate from 79–80 rubles, ”Anna Bodrova, senior analyst at IAC Alpari, said in an interview with RT.

As Russian Prime Minister Mikhail Mishustin said on Thursday, the situation in the Russian economy is under control. According to him, the country has a "large margin of safety" to fulfill all budgetary obligations. Thus, the Central Bank's gold and foreign exchange reserves have already exceeded $ 570 billion, and the volume of liquid assets of the National Wealth Fund is estimated at more than 10 trillion rubles.

“The situation in the Russian economy is under the control of the president and the government. We have all the tools to go through it calmly, without shocks. We have enough resources to maintain financial stability, ”he said, indicating that, together with the Central Bank, the necessary measures to stabilize the situation are promptly taken.

According to RT experts surveyed, further ruble dynamics will largely depend on the situation on international commodity markets. According to Anatoly Pokatovich, the chief analyst of BCS Premier, in the event of a further decline in oil prices to $ 30 per barrel, the dollar may gain a foothold above 75 rubles.

“However, the monetary authorities in the current conditions can use foreign exchange interventions, thereby increasing the volume of foreign currency sales. Also, the Central Bank, as part of the proactive impact to protect the debt market, can launch auctions for the purchase of federal loan bonds (OFZ), ”Pokatovich notes.

According to Anna Bodrova's forecast, in the near future the dollar will remain in the range of 70-75 rubles. Meanwhile, according to estimates by QBF analysts, in the first half of 2020, the dollar may gain a foothold of 69-73 rubles, and the euro - near 79-83 rubles.