Placement of Eurobonds by the Ministry of Finance could be a turning point for the ruble and begin to weaken. Monday on the Moscow stock exchange the dollar has risen to 58 rubles. in addition, the ruble is under pressure of low oil prices and projected capital outflow of foreign investors. Experts believe that this summer, the dollar could rise to 60-62 RUB.
The demand for Eurobonds, which began on 19 June the Ministry of Finance, exceeded $3 billion, Reuters reported, citing sources. The book of applications for Eurobonds with bets coupons a 4-4. 5 and 5-5. 5% per annum and with maturity of 10 and 30 years was opened by the MOF at 11.30. Is expected to close on June 30.
In 2017, according to the law on the budget, Russia will attract foreign markets to $3 billion Some editions already in circulation securities are to be exchanged for the new issues worth $4 billion.
Although $3 billion is insignificant and could greatly affect the course of the Russian currency, it can become the “last straw” for the ruble.
This placement can put pressure on the Russian currency in a number of other factors, said the Deputy Director of the Center for development HSE Valery Mironov.
“If all $3 billion will be purchased by the local participants on the funds held in the accounts in Russian banks, the excess FX liquidity will be reduced to $7 billion (analysts of Raiffeisenbank) and, as a result, its deficit may come by the end of summer,” write the experts of ZAO Raiffeisenbank in the daily review the Daily Focus. In this case, the placement of Russian Eurobonds in dollars will be a factor of pressure on the ruble, they said.
At the same time on the Russian currency in recent years, and so is influenced by a number of negative factors.
Monday on the Moscow exchange for the first time since may 18, the dollar exceeded 58 rubles Euro for the first time since 1 February has risen to 65 rubles.
As of 19.30 on Moscow exchange, the dollar was worth 58,41 RUB, EUR — RUB 65,23
The official Euro to ruble set by the Bank of Russia on Tuesday, increased by of 40.53 kopecks to RUB 64,86, the dollar — 21,77 kopecks to RUB 57,96
Pressure on the ruble, oil prices, experts explain. From 7 June it was trading for less than $50 per barrel. Monday as of 20.30 GMT, Brent crude was worth $of 47.17 per barrel (-0,44% to the closing price of the previous day), WTI — $44.69 per barrel (-0,62%).
“Now there are unexpectedly low oil prices, despite prolongation of the agreement of OPEC. It affects the growth of oil reserves in the United States and the lack of lower production in countries outside OPEC,” says Valery Mironov.
Us oil service company Baker Hughes last Friday announced that this week the number of drilling rigs in the US increased by six to 933 units. The number of oil rigs had reached a 747 units, and gas — 186. For the year to June 2016, the rig count has more than doubled.
This information also serves as one of the reason for the decline in oil prices.
A negative impact on the ruble provides and discussed in the U.S. Congress, the adoption of the law on the strengthening of sanctions against Russia.
In addition, against the ruble played two regulators — the fed and the Central Bank. The fed has increased base rate by 0.25 percentage points to a range of 1-1,25%, and the Board of Directors of the Bank of Russia on 16 June decided to reduce the key rate by 0.25 percentage points to 9% per annum. Thus, for speculators have become less profitable operations carry-trade. According to Valery Mironov, these two regulators will strengthen outflow of foreign capital from Russia.
The fall of the ruble could be more as the Bank of Russia decided to lower the rate by 0.5 percentage points
“Reducing rates by 0.5 percentage points would increase volatility and pressure on the ruble, as the ruble assets, including OFZ will become less attractive, and part of non-residents will begin to implement exit strategies of these assets,” — says Artem Deev, senior analyst at Amarket.
At the same time Valery Mironov considers that in the summer it is possible appreciation of the dollar to RUB 60-62
In June, the Deputy head of the Ministry Vasily Osmakov said that the Ministry believes that such a course of the dollar (just above 60 RUB.) favorable for the Russian industry. As reported by the economic development Ministry in April, it expects to see a substantial weakening of the ruble in the coming months, to 63-64 rubles per dollar.
The baseline scenario of the macroeconomic forecast to 2020 the Ministry of economic development suggests that the dollar by the end of 2017 will cost 68 rubles, by the end of 2018 and 70.8 RUB.
But the weakening of the ruble up to this level will not help the industry, said Mironov. Business needs predictability of economic policy, which there is not yet in sight, he said.
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