By Boris Solovyov
The ruble started the new week with an attempt to strengthen. But it did not last long. Already closer to the beginning of the main session, when large players enter the auction, the Russian currency began to weaken, reaching 97 rubles by noon. per dollar.
In their comments, financial analysts continue to attribute the weakness of the ruble to the deterioration of Russia's balance of payments as a result of growing demand for foreign currency from importers, against the backdrop of a decrease in its inflow due to low prices for the main Russian exports.
The ruble also lost support from the monetary authorities.
“The ruble quotes were negatively impacted by reports that the Ministry of Finance would not suspend the budget rule and, as part of it, would buy foreign currency in the amount of 1.8 billion rubles daily. At the same time, it is important to note that the Central Bank, nevertheless, will carry out net sales of foreign currency in the amount of at least 0.5 billion rubles. daily from August 7 to September 6, 2023 (RUB 0.5 bln of sales equals RUB 2.3 bln of sales due to the use of NWF funds minus RUB 1.8 bln of purchases under the budget the rules of the Central Bank can buy not only foreign currency, but also gold),” says Dmitry Postolenko, head of the fixed income management department of Pervaya Management Company.
Practicing traders periodically note sharp and fundamentally unreasonable surges in demand for foreign currency. They attribute this to the purchase of dollars by non-residents, who were allowed by the Russian authorities to sell the Russian business and withdraw the resulting capital.
It is worth noting the current balance, which has deteriorated greatly. Russian Finance Minister Anton Siluanov last week reasonably said that the recent depreciation of the ruble is primarily due to a weak trade balance - the inflows and outflows of currency in and out of the country.
At the same time, it must be remembered that Russia has set a course to pay for its oil supplies in the currencies of friendly countries, which are, so to speak, conditionally convertible. That is, they receive revenue in yuan and rupees, and importers need a dollar, the influx of which into the country has greatly decreased. While "high volumes of purchased imports and outflows of capital from Russia occur precisely in dollars and euros," Alexander Potavin, an analyst at FG Finam, notes in a commentary to Expert.
Thus, there is a deficit of the dollar on the currency market of the Moscow Exchange. The demand for it and its price are growing, and along with the “American”, the price of the same yuan also rises through cross-rates.
Now the market is still waiting for the strengthening of the ruble, which should lead not only to rising oil prices, but also to a decrease in demand from importers.
“We are waiting for a reduction in demand for foreign currency, as importers will begin to wonder if they will be able to sell their products on the Russian market at greatly increased ruble prices?” Alexei Antonov, head of the investment consulting department at Alor Broker, asks.
Both traders and analysts are waiting for intervention in the trading of the monetary authorities. For the Bank of Russia, the growth of the dollar exchange rate is unfavorable because it will definitely respond with a sharp increase in inflation, which the Central Bank has been trying to fight with periodic success for more than a decade.
There is no doubt in the market that the Central Bank will raise the key rate at the next meeting, which will increase the cost of servicing public debt. But so far, neither the Central Bank nor the Ministry of Finance have made any, even verbal interventions in support of the ruble.
Among foreign exchange market experts, the opinion is growing more and more that the current devaluation is provoked by the Russian authorities, who are trying to fill the budget in this way. “The continuous and strong devaluation of the ruble indicates the possible interest of the financial authorities in this process,” Potavin said.
However, everyone is still waiting, if not for the strengthening of the ruble, then at least for its stabilization.
“We expect that in the short term the quotations of the ruble against the dollar will be in the range of 94.0-98.0 rubles. per dollar,” Postolenko writes.
“In the short term, the ruble quotes against the dollar will be in the range of 94.0-98.0 rubles. per dollar, ”Potavin completely agrees with him.
But at the same time, Antonov warns, “any negative can provoke a slight panic in the foreign exchange market with the removal of the dollar-ruble pair above 100.”
The psychological importance of this mark does not require much comment. However, for a short time, the ruble/dollar pair already broke through it in March 2022. However, then a wave of strengthening of the ruble followed, which is not to be expected now. But this is almost obvious, but the answer to the question of whether the ruble will be allowed to fall below 100 per dollar or not remains a mystery. As well as all the reasons for its decline, some of which, associated with the behavior of the economic authorities, allows us to judge ourselves only at the level of assumptions.
This article orginally appeared in Russian at expert.ru