Collapse of ruble: dollar surges above 60, euro climbs to 74
The Russian ruble was down more than 3% this morning as the fresh US sanctions against Moscow roiled the currency.
The dollar added 1.86 rubles against the ruble and reached 60.03 rubles first time from November 16, 2017, according to trading data.
The euro rose by 3.71% against the ruble during the trading session on the Moscow Exchange on Monday and climbed to 74.03 rubles. The euro was at the level of 74 rubles last time on August 4, 2016.
It was reported earlier the MOEX Russia and RTS indexes plummeted 9-11% against the background of sanctions introduced by the United States against Russia on April 6.
The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to a correspondent of Vestnik Kavkaza, noted that the current collapse of the indexes and the ruble is just a panic on the stock exchange. "Markets always vigorously react to this kind of negative news. These sanctions threaten the Russian business with a lot of losses, a decrease in the cash flow, so the collapse of the indices and the ruble was quite expected. But real consequences of the sanctions will become clear only when Western regulators on them will determine their position on this issue," he said.
The economist warned that this panic does not have any clear limits. "Objectively, our national currency can reach the level of 62-63 rubles per dollar, but only if there are no other additional negative news. The decline will continue in any case, but one could not predict now when it is over," Sergei Hestanov said.
The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, in turn, characterized the high volatility of trading as a short-term panic. "It's pure speculation. If it was something macroeconomic-related, which have a fundamental basis, then it would be possible to predict something. But there are no grounds for a real substantial depreciation of the ruble now. Perhaps, one of the Russian companies had a need to buy a certain amount of foreign currency in order to make unplanned payments," he believes.
"It is expected that the effect of negative events after the introduction of sanctions will be temporary. As events occurred on Friday, when the Russian market de-facto stopped its work, the demand for currency, which accumulated over the weekend, spilled over onto the market. And now we can see how effective sanctions pressure on Russia looks like," Konstantin Korishchenko drew attention.