There was a sharp decline in the dollar and the euro exchange rates today on the Moscow stock exchange. Dollar fell below 62 rubles for the first time since October and then updated its minimum of 2016, while the ruble rose against the backdrop of the increase in world oil prices.
The average dollar exchange rate was 61.91 rubles; the average euro exchange rate was 65.38 rubles, the currency basket declined by 0.62 rubles and reached 63.47 rubles.
Later, the dollar retreated to 61.645 rubles, which is the minimum rate in 2016, Interfax reports. The dollar was below the current official exchange rate by approximately 1.4 rubles. and the euro - by 1.6 rubles.
The ruble sharply increased due to the strongest rise in world oil prices against the background of the results of the meeting of oil-producing countries in Vienna. As of 10:00 am Moscow time, the cost of the February futures of Brent crude oil on London's ICE trading increased by 4.3% to $ 56.68 per barrel.
Advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to Vestnik Kavkaza, noted that the dollar and the euro are traded so cheaply due to the increased oil prices. "The main factor that strengthened the ruble is a powerful rise in oil prices. At the same time, a strong ruble is unfavorable for exporters in terms of the federal budget deficit," the expert warned.
In this connection Sergey Hestanov expects that in the near future the central bank may begin to take steps to retain the value of the dollar. "There is a high probability that the Bank of Russia will actively buy foreign currency to replenish international reserves, which will limit the further strengthening of the ruble. In this case, the Central Bank will focus on inflation. As soon as it sees a strong deceleration of inflation, it will immediately begin to replenish international reserves," he explained.
The economist noted that currently the seasonal factor is not so significant as in previous years. "On December 14, the US Federal Reserve may decide to change the refinancing rate, and if the rate is raised, it will have a negative impact on the oil price and the ruble exchange rate. Probably, an external factor will normalize the exchange rate without any intervention by the Central Bank," the advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house concluded.
An associate professor of Stock Markets and Financial Engineering of RANEPA, Vasiliy Yakimkin, agreed with him. "Of course, oil is the main driver in the strengthening of the ruble. The price of Brent crude today reached nearly $ 57.8 per barrel. Now it is declining, but still, compared with Friday the price is high. All the tools correlated with oil responded to this growth, including the Russian ruble. Thus, an agreement with OPEC on oil production cuts in the countries outside the cartel has started to work. If this arrangement is observed, the oil and the ruble will continue to rise," he expects.
There are other factors supporting the ruble today. "In particular, macro-economic estimates for the first quarter of next year. A number of Western macroeconomic experts say that the Western investment is expected in Russia. Apparently, everyone hopes that Trump's new team will seriously weaken the pressure on Russia. Already now Russia's assets in rubles and rubles are bought by Western global funds," Vasily Yakimkin noticed.
The expert considers the US Federal Reserve meeting, which may decide to raise rates, a risk factor. "If the rate is not raised, it will seriously strengthen the ruble, and if it is raised by 0.25%, it will give the ruble a weak decline in the short term, then it will strengthen again. If the rate is raised by 0.5%, the ruble will fall against the dollar," the economist predicts.
Vasily Yakimkin reminded that the current strengthening of the ruble is extremely disadvantageous for the Russian Ministry of Finance. "It means a big budget loss for it, because the Ministry of Finance placed its surplus funds in foreign currency accounts. Therefore, they will not let the ruble to increase greatly. The dollar reserves will be replenished, so the dollar exchange rate will not fall below 59-60 rubles," the associate professor of Stock Markets and Financial Engineering of RANEPA concluded.