The Central Bank of Russia started its work towards increasing the supply of rubles in the money market, despite the decline in oil prices, which endangers the stability of the exchange rate.
In particular, instead of deposit operations, which have been implemented over the past two weeks to withdraw excess liquidity from the system, the Bank of Russia will resume repurchase agreements (RP), the bank's press service said.
As a result, the banking system will regain 400 billion rubles left at the Central Bank's deposits a week ago.
In addition, the Bank of Russia will issue 620 billion rubles, which will be offered to banks as a loan with an interest rate of 10%.
In total, there can be 1.02 trillion rubles on the market during one day, Finanz.ru reports.
An associate professor of Stock Markets and Financial Engineering of RANEPA, Vasiliy Yakimkin, speaking with a correspondent of Vestnik Kavkaza, explained that the Russian Central Bank seeks to increase both medium and short-term liquidity. "I think that now many financial flows will be directed to the foreign exchange market, therefore, the ruble may be under pressure, especially considering that the key interest rate was reduced on Friday. If the US Federal Reserve decides to raise its key rate, the dollar will go up, while commodity assets, on the contrary, will go down, as well as the ruble," the expert warned.
"On the other hand, in order to avoid negative consequences, the central bank will attract excess liquidity from the credit institutions, perhaps even by [the rate of] 10.5% As a minimum, it will soften the strong pressure on the currency market," Vasily Yakimkin added, assessing the highest dollar exchange rate at the level of 67-68 rubles.
The economist rejected opinions prevailing in some media that the prepared collapse of the ruble is associated with the completion of the electoral cycle. "In general, there is a strong lobby of a weak ruble in Russia. If the cost of production is low, it is possible to minimize the costs and receive benefits when supplying to foreign markets. In fact, the main challenge now is to start exports of small and medium businesses, and this requires a weak ruble," he recalled.
