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The fears were justified: the ruble will fall by year-end

Страхи оправдались: рубль упадет к концу года

The expectations of the Russians, who recently spoke about the feeling of “overvalued” exchange rate, began to come true. Despite the fact that the Russian currency “sways” from side to side and from time to time, the ruble is growing, the whole “wood” started the traditional year-end “way down”. In the near future on the Russian currency will put pressure to pay off foreign debt, and the dollar may rise to 60-65 rubles, experts say.

The official rate of dollar established by Bank of Russia for the weekend and Monday, rose to 59,28 rubles. The Euro also “added” the Euro is trading at 68,97 rubles. Dual currency basket value calculated at official rates on the weekend and Monday, increased in comparison with Friday by 10.21 kopecks, amounting to RUB 63,64

The last time the Russian currency reeling from side to side: the ruble is growing, fueled by growth in oil prices on the background of arrests of princes in Saudi Arabia, then the next day falls with the price of “black gold”. On some days the ruble and oil are mixed: oil prices rising and the ruble falling.

The experts ‘ forecasts is also controversial: some saw that the price of oil broke through another psychologically important level of $64 per barrel, saying that the ruble should grow up, others think exactly the opposite.

Judging by the polls, Russians are preparing for the weakening of the ruble. A recent research poll, our fellow citizens believe the exchange rate is overvalued.

Thus, about 60% of respondents do not exclude that within three months, the dollar’s value will rise to 63 rubles., and 49% of respondents believe that next year it will be about 64 RUB

Interviewed experts also believe that in the near future the ruble will fall, and if in some points the dollar or the Euro falls briefly, then stands quickly to stock exchange before the new year holidays.

At the end of the year the dollar may cross the mark of 60 rubles, according to analysts. At the same time to sink the Russian currency even more. Says financial analyst FxPro Alexander Kuptsikevich, the dollar may cost above 65 rubles.

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On the ruble exchange rate is influenced by a number of factors. First, it is the Treasury with its currency purchases in the domestic market. On November 8, the Ministry increased its daily purchase of foreign currency from 3.5 to 5.8 billion rubles. in day. The Agency will work in such volumes up to December 6 this year. “It distorts the balance of supply and demand in the market”, — said Timur Nigmatullin, a financial analyst of the company “Opening Broker”.

When the Treasury just entered the market, the volume of purchases was not as large and almost no effect on the exchange rate, and now they have become large-scale, say experts. The ruble is no longer possible to dismiss them, as it was in the first months of the year, and the very thought of such seller affect the course of trading.

So, in the third quarter of this year, the Ministry of Finance has bought currency in the amount of about $2 billion, and total annual volume of purchases could exceed $12 billion, written by experts of the “center of development” in the “Comments about the state and business”.

“This practice of the Department prevents the ruble to grow stronger than he would be at current oil prices,” — says Kuptsikevich.

This week the price of Brent crude oil has overcome psychologically important level of $64 per barrel. It was high from June 2015. Such growth of prices for “black gold” occurred against the backdrop of anti-corruption scandal in Saudi Arabia. Then came the pullback in oil prices.

Further weakening of the ruble, the experts perhaps due to the ongoing pullback in oil prices. Clarity in this matter: the oil market is now the necessary respite to assess the current balance of supply and demand. According to 14.24 GMT, the January futures for Brent oil reached $63,97.

“November and December are traditionally weak ruble for months. If you look at the history of the last 15 years, it was only a couple of years, when the ruble strengthened against the downward year-end trend.

I absolutely didn’t matter, rising oil prices or not,” — says Vladimir rozhankovsky, senior analyst at managing company “Horizont”.

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According to Nigmatullin, the year-end on ruble quotes usually pressure that companies are paying off our foreign debts. Usually, external debts are denominated in dollars, and companies have to sell rubles to buy the American currency on the exchange to service its external debt.

According to the data of macroeconomic statistics in the fourth quarter 2017 first quarter 2018 payments on the external debt of non-financial organizations, including principal and interest, is $25 and $28.6 billion respectively. Traditionally, a significant volume of payments, according to the macroeconomic data, have for December ($15 billion). A comparable amount of payments ($16 billion) is in January 2018.

However, the Bank of Russia notes that, as shows historical experience, a significant portion of these payments is usually extended or refinanced. Excluding intercompany payments, net payments can be up to $23.5 billion in the fourth quarter 2017 and $15.9 billion in the first quarter of 2018.

In addition, according to Mark Goichman, leading analyst GK Teletrade, against the ruble are strong factors. “This is the total dollar increase in the world associated with prospects for tax reform President Donald trump and the policy change of the Federal reserve system of the United States. In addition, it is also possible adoption of new sanctions against Russia till the end of the year. It has stopped investors, which was manifested at the last placement of OFZ on 8 November. Then, from the tranche of 15 billion rubles was able to realize only 12.5 billion rubles, and at a higher rate,” – said the expert.

But early next year, the ruble still get a breather, experts say. “Managers will come from vacation, you will see that it is necessary to make the required payments and they will need rubles. In a situation of shortage of rubles because many companies go for the new year holidays in foreign currency, considering it more stable, would be contrary to concertize the currency into rubles, and from mid-January to begin the growth of demand for rubles”, — sums up rojankovsky.

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