Ruble currency storm put on hold

Ruble currency storm put on hold

Russia's ruble exchange rate rose today on the Moscow Exchange.

At the moment of the opening of the stock exchange US currency traded at 67.11 rubles, in an hour it reached a low of 66.51 rubles, as of 11:10am (MSK). 

Currently, the dollar traded at 66.75 rubles.

The Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, speaking to Vestnik Kavkaza, noted that today, there was a profit taking today as a result of the closing of the short positions on the ruble, collected in recent days on the negative news of US sanctions against Russia.

"Those traders and foreign investors, who opened short positions on the ruble and long  - on the dollar on political and economic events, stopped today and started to lock in profits on the growth of the dollar. Thus, we see a correction in the ruble-dollar currency pair in the form of strengthening the ruble on relatively positive news that the market has already absorbed all the negative political scenarios of strengthening and introducing new sanctions against Russia," he said.

According to the expert, the ruble will even rise above the spring levels. "The central bank and the Ministry of Finance set the target level at about 61.5 rubles per dollar for 2018. I think that after a while the ruble exchange rate will begin to strengthen, and the dollar rate will be lower than 65 rubles," Dmitry Piskulov predicts.

The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, in turn, also linked the current rise of the ruble rate with a profit taking. "Such a correction after a sharp price movement was due to the fact that those who made money on the growth of the cost of goods want to lock in profits. At the same time, the scale of ruble appreciation is much less than the scale of its weakening in recent days. So it warns us that we should not think that hard times for the ruble are over. Unfortunately, the sanctions policy remains rather rigid, oil prices have slightly decreased, so it is possible that over time the dollar's growth may continue," he warned.

In this regard, the economist does not expect that the ruble exchange rate will be able to rise to 65 rubles. "The strong ruble is still not profitable for the budget, as it is not profitable for exporters that form one-third of the budget. In addition, if it is strengthened, the Central Bank and the Finance Ministry will increase the purchase of currency to replenish international reserves. Therefore, the ruble rate will weaken, although, perhaps, not as vigorously as it was in the previous days," Sergei Hestanov concluded.

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