On Wednesday, August 18, the Russian currency is moderately strengthening on the Moscow Exchange.
During the trades, the euro fell by 0.09% and for the first time since June 29 reached 85.95 rubles.
At the same time, the dollar rate fell by 0.16% to 73.4 rubles.
The official exchange rate of the Central Bank on August 19 was set at 73.46 rubles per dollar and 86.12 rubles per euro.
According to analysts, the strengthening of the national currency is partly due to the weakening of the euro on the international market.
This opinion was expressed in a conversation with RT by Andrey Kochetkov, a leading global research analyst at Otkritie Broker.
“The euro is currently under pressure and is losing ground against the dollar and other currencies.
Investors expect a tightening of the monetary policy of the US Federal Reserve System (FRS), which may lead to the strengthening of the dollar on world markets, ”the expert emphasized.
Recall that in the spring of 2020, against the backdrop of the coronavirus pandemic, the US Federal Reserve launched a quantitative easing program. The regulator began to print dollars and buy government bonds in an unlimited amount on the stock market. Such a policy should lead to an increase in the money supply in the financial system and accelerate the economic recovery from the consequences of COVID-19. At the same time, the Fed's actions are spurring inflation acceleration in the country.
“To combat rising prices, the Federal Reserve may announce the curtailment of the quantitative easing program or indicate the duration of the initiative. If the rhetoric of the regulator is harsh, then this may further shake the position of the euro. For the ruble, like other currencies of developing countries, the effect of the Fed's decision will be limited, "Olga Belenkaya, head of the macroeconomic analysis department of FG FINAM, said in an interview with RT.
As the expert added, one more reason for the observed appreciation of the national currency was the positive news from the world commodity markets. During today's trading, the price of Brent crude was close to $ 70 per barrel, although at the beginning of the working week the figure dropped to $ 68.25 per barrel amid the unstable political situation in Afghanistan. Further changes in oil prices will largely depend on demand in the largest consumer countries, Belenkaya does not exclude.
“Now we are seeing an increase in oil prices due to the data of the American Petroleum Institute (API) on the reduction of crude oil reserves in the United States for the week by 1.2 million barrels.
Such dynamics against the background of a fairly high demand for fuel in America leads to the stabilization of prices for raw materials.
Nevertheless, the positive effect of the rise in oil prices is smoothed out by the operations of the Ministry of Finance and the Central Bank to buy foreign currency within the framework of the budget rule, ”the expert noted.
Note that, according to the budget rule, during the rise in the price of hydrocarbons, the Ministry of Finance buys foreign currency through the Central Bank and thereby puts pressure on the ruble.
At the same time, in the event of a collapse in the energy market, the Ministry of Finance stops operations - and the pressure on the ruble weakens.
Such actions are necessary to gradually reduce the relationship between the dynamics of the national currency and oil prices.
Significant support for the ruble is also provided by the strengthening of business activity on the Russian stock market, analysts are sure.
So, on Tuesday, August 17, the Mosbirzh index updated its historical maximum and for the first time over the entire observation period exceeded the mark of 3944 points.
“Operations with stocks and bonds on the stock exchange partially stimulate the growth of the number of foreign players.
The influx of foreign investors naturally leads to an excess of demand over supply, which increases the rates of the country's financial instruments, including the national currency, "Mikhail Zeltser, an expert on the BCS World of Investments stock market, emphasized in a conversation with RT.
Support for currency
According to experts, in the medium term, one of the determining factors for the ruble will be the actions of the Central Bank. In 2021, the regulator began to confidently raise the key rate and in July immediately raised it by one percentage point - up to 6.5% per annum. The increase was the sharpest since December 2014. In turn, a high key rate traditionally leads to an increase in investor interest in the federal loan bond (OFZ) market.
Recall that OFZs are debt obligations guaranteed by the Russian government.
Financial market participants buy securities issued by the Ministry of Finance and receive a stable income from them.
In other words, holders of government bonds lend their money to the Russian economy.
The yield on debt securities directly depends on the interest rate set in the country.
Thus, in the event of a further increase in the borrowing rate of the Central Bank, investments in OFZs will become more profitable for investors.
AGN "Moscow"
© Kirill Zykov
“Thanks to the actions of the regulator, the ruble has already returned to itself a positive yield.
We note an increase in the inflow of investments in Russian debt securities, which at the same time provides long-term support to the national currency, "said Andrei Kochetkov.
At the same time, the Central Bank may go for another round of rate hikes in the medium term, which may increase the inflow of investor funds into ruble-denominated assets, Belenkaya believes.
As a result, by the end of September the dollar exchange rate will generally be in the range of 71-75 rubles.
In turn, the euro exchange rate may fluctuate within 84-89 rubles until the end of the year, the expert predicts.
According to Mikhail Zeltser, in the absence of any serious geopolitical shocks and against the background of a smooth recovery of the Russian economy, the dollar exchange rate by the end of 2021 may approach 70 rubles, and the euro rate - to 84.5 rubles.