The Russian Central Bank considers a repetition of the financial crisis of December 2014 to be unrealistic, according to the Central Bank report on financial stability. "In the current environment, the repetition of a situation similar to December 2014 is unrealistic," the report said.
They noted that even in the case of an extremely negative scenario, including a sharp drop in oil prices and capital outflow from emerging markets due to rising interest rates in the developed markets, the Russian Central Bank "has a wide arsenal of tools to ensure stability in the financial sector." The Central Bank notes that it continues to work on expanding the collateral base, the assets that banks can offer to the regulator as collateral for obtaining a loan.
"Mortgages, that can be refinanced through the issuance of mortgage bonds, have a notable potential," TASS cited the Central Bank as saying.
A leading researcher at the Institute of Applied Economic Research of the Russian Presidential Academy of National Economics and Public Administration, Alexander Abramov, told Vestnik Kavkaza that the only unpredictable element of the current situation is the price of oil, "it may rise to $80 per barrel and fall to $20 per barrel, so it's too optimistic to think that a crisis is no longer possible." "Except for this remark, I don't see any subjective factors for a recurrence of the December crisis," Abramov said.
The economist said that the Central Bank has such an effective tool to ensure the stability of the financial system as a repurchase agreement. "At the end of the year, when the companies will need currency to settle external debts, the Central Bank will return to the repurchase agreement, which was successfully used at the beginning of this year – the main thing is not to abuse it. Then, the Central Bank has a traditional instrument for the key rate and the refinancing of the banking system," Alexander Abramov concluded.
The associate professor of stock markets and financial engineering of RANEPA, Vasiliy Yakimkin, in his turn, stressed that the development will depend on several external factors. "First of all, if the US central bank raises its key rate the ruble will fall, because capital will flow to the United States, leaving the emerging markets first. In addition, the Americans have predicted a new fall in oil prices to $50 per barrel. In that case, September will be a critical month in terms of the Federal Reserve System's policy, and October and November – in terms of oil prices. In addition, if the United States chooses to tighten sanctions, the ruble will be under additional pressure. It is possible that we will see 80 rubles per dollar," Yakimkin said.
The expert drew attention to the fact that the Central Bank of the Russian Federation is currently playing on the depreciation of the ruble. "By buying dollars the Central Bank is putting pressure on the ruble, because the financial regulator and the Ministry of Finance want the ruble to be cheaper, playing more against the ruble, rather than against the dollar," he said.
