Is ruble on the rise?

Is ruble on the rise?

The ruble is growing significantly against the background of a rebound in oil prices, which are fixed above the level of $31 per barrel of Brent brand. The dollar dropped below the psychologically important level of 80 rubles, even though the day before it jumped to nearly 86 rubles.

Today, the dollar exchange rate, by 'tomorrow's' calculations, fell by 4.53 rubles to 78.1 rubles, and the euro fell by 4.25 rubles to 85.75 rubles, according to the data of the Moscow Stock Exchange.

The exchange rate of the Russian currency is on the rise thanks to a confident rebound of the oil market and the oil prices got impetus after the statements of the head of the European Central Bank, Mario Draghi, who stated that the rate at the level of 0.05% per annum will remain the same or lower for some time, which helped the growth of risk assets, RIA Novosti reports.

As a result, the Russian currency has regained about 7 rubles against the dollar and 8 rubles against the euro, which dropped to 79 and 85.7 rubles respectively. Next week, in case the oil prices will stay above 30 dollars per barrel, the continuation of a moderate strengthening of the ruble to the level of 77-78 against the dollar is possible.

The ruble may continue to strengthen in the coming months after a sharp rebound from record lows, as it was in February of last year. Vestnik Kavkaza asked experts, Dmitry Piskulov and Vasily Yakimkin, whether such a scenario is possible.

The Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, in an interview with the correspondent of Vestnik Kavkaza, explained that the ruble does not jump. This is called exchange rate fluctuations.

"This is exchange rate volatility, which was quite high even before. There have been times in the past year, similar situations have occurred. But here, one explanation lies in the fact that in the beginning, the market was dominated by purchases and negative market expectations related to oil price, which was fueled by a certain speculative demand from a number of banks and organizations. That is why the Bank of Russia does not interfere in the process of exchange rate formation, due to the fact that it does not target the ruble exchange rate in the framework of a discrete policy, and only monitors inflation. The exchange rate increased quite strongly, a lot of valuable positions were opened, and some exporters held back the sale of revenues," the expert explained.

"In addition, the uncertainty due to the decision of the US government on the key rate next Wednesday, on federal funds of the Federal Reserve System, which may show unexpected results, has an effect on many people. Most analysts believe that the government will not lower the rate, which will mean a decrease in demand for dollars all over the world, and against the ruble also," the financier assured.

As Associate Professor of the department of stock markets and financial engineering of RANHiGS, Vasily Yakimkin, explained in an interview with the correspondent of Vestnik Kavkaza, that the reason for today's sharp jump is the usual volatility, as the experts predicted.

Answering a question about what helped the ruble to recapture positions today, the expert noted that the main drivers of growth in favor of the ruble are, of course, rising oil prices and verbal interventions from the Central Bank.