Ruble defeats autumn depression
Contrary to the fears of experts about a heavy fall for the Russian national currency, in September the ruble managed to hold above the strip of 70 rubles per dollar, and in October it started to rise. In particular, today the dollar exchange rate dropped to 61.98 rubles, and the euro up to 69.80 rubles.
The deputy chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, told Vestnik Kavkaza that the stability of the ruble in September was due to the stability of the oil market. "The ruble fell due to oil prices. When prices fall, the ruble devalues, when prices rise, the ruble strengthens. Therefore, the main reason for the relative stability of the ruble is slight fluctuations of oil prices," the deputy said.
At the same time, Anatoly Aksakov warned that such a dependence does not guarantee the preservation of the current situation to the end of the year. "If the oil price will fall again, the ruble will go down too. This may also happen due to the decision of the US Federal Reserve on the refinancing rate," he explained.
An associate professor of stock markets and financial engineering of RANEPA, Vasiliy Yakimkin, also said that oil prices are a key factor in the strengthening of the ruble. "The US economic data on serious reduction of oil reserves was published yesterday. It has led to the fact that oil is getting more expensive, and as a result, the ruble strengthens. The price of the ruble is easy to calculate: we take Russia's Urals oil in rubles and divide by the price of Brent oil in dollars. This algorithm has been kept for 14 years with 80% accuracy," he recalled.
"First of all, there is, of course, the policy of the US Federal Reserve: more and more experts think that the first rate hike on funds in the open markets from the Finance Committee will be in March 2016, before that it will remain in the range of 0% to 0.25%. This keeps the demand for risky assets, including Russian stocks and the ruble. The slight sterilization of money supply in the country is also working to ensure the ruble's growth. There is no great demand for foreign currency now, the demand for dollars and euros fell sharply – however, if the ruble is not sold, it wouldn’t become cheaper," the expert said.
Yakimkin expects that the ruble will be 63-64 rubles per dollar by the end of the year.
The chairman of the National Foreign Exchange organization, Dmitry Piskulov, agrees with the previous experts that the ruble is determined by oil prices. "In fact, we have two factors, but they all boil down to the price of oil. We can see an increase to $47-50 per barrel, whereas there was an expectation that oil prices would fall to the level of $45, or even $40. Now the oil price has gone beyond the level of $50, and the market is still living with the idea that oil prices will rise. Also, the prices are gradually rising due to the instability in the Middle East," he said.
Piskulov added that the completion of the fall of the Russian economy also strengthens the ruble. "We can expect a stabilization and increase in the rates of economic growth, that is, a reduction in the pace of decline is good, and growth, which can happen in the next year, affects the improvement of the ruble. Now we see a correction of the rate, caused by the news about oil, Syria and the growth of the Russian economy," the expert explained.