Prospects of the ruble

As of 8.10pm at the Moscow Exchange, the dollar rate was fixed at 56.25 rubles, the euro at 63.34 rubles. Alexander Arshavsky, an associate professor of the RANEPA M.A. Limitovsky Chair of Corporate Finances, Investment Projecting and Assessment, said that the demand for currency had risen due to the need to pay for corporate sector external debt, oil prices had fallen. In his opinion, no additional demand for currency will be seen due to the dropping tourism flows.

The expert noted two mid-term factors affecting the currency rate: the situation with the world the oil prices varying between $50 and $60 per barrel.

Vasily Yakimkin, an associate professor of the RANEPA Chair of Stock Markets and Financial Engineering, pointed out speculations on the market, purchase of currency by the population and interventions. He does not expect the ruble to gain ground in the near future. Yakimkin named the following factors affecting the currency prices: the policy of the Central Bank, oil prices, recession in the Russian economy, G7 threats to extend the sanctions, the annulment of REPO auctions, rising interest rates. The Central Bank may lower the key rate, according to the analyst. He said that the government should keep the volatility on the market under control, reminding that the Central Bank had purchased $141 million, not $200 million on Thursday. Well-controlled volatility will keep the currency rate at 57-58 rubles per dollar.

Alexander Abramov, leading fellow at the RANEPA Institute of Applied Economic Studies, believes that speculators on the market fear that the Bank of Russia would start purchasing the currency and start refinancing the banks in rubles. The Ministry of Finance, in his opinion, benefits from giving speculators signals about the ruble's fall. Concerning the mid-term factors affecting the currency rate until the end of the year, he named rates set by the Federal Reserve System, which will become a topical problem in autumn.