MOSCOW, June 28 – PRIME. The ruble on Tuesday strengthened against the dollar and the euro against the backdrop of a continuing imbalance in supply and demand for foreign currency, follows from the dynamics of trading on the Moscow Exchange.
The dollar rises in price against world currencies on the comments of the representative of the US Federal Reserve
The dollar exchange rate with settlements “tomorrow” at 19.00 Moscow time (to close) lost 1.58 rubles and dropped to 51.58 rubles, for the first time since May 2015, the euro lost 1.75 rubles and fell to 54.55 rubles, for the first time since April 2015 of the year.
RUBLE UPDATES MAXIMUMS
The ruble broke through the price ranges in which it was for several days in a row for the dollar and the euro. Since the start of trading, the dollar has been declining, falling below 53 rubles, this level he could not overcome over the past 4 sessions. By the last hour of trading, the dollar accelerated its decline and fell below 52 rubles, updating the minimum since May 2015. The euro was also in the negative zone from the start of trading and fell below 55 rubles, having updated the minimum since April 2015.
“There is still a trade surplus, although it has continued to decline since April. In addition, Western currencies remain toxic in Russian jurisdiction: they are difficult to use for imports, many banks already have a fee for custody, these currencies are of little use for investment in the current conditions. Thus, there is an excess supply of foreign currencies, which supports the ruble,” said Dmitry Alexandrov from Ivolga Capital investment company.
The imbalance of supply and demand for foreign currency remains on the Russian market, notes Dmitry Babin from BCS Mir Investments, which contributes to the systematic strengthening of the ruble. He draws attention to the absence of factors that can significantly change this situation by increasing foreign currency purchases or reducing sales.
“Towards the end of the tax period in June, when income tax payments in the amount of about 0.4 trillion rubles are being made, the Russian currency looks stable. In the face of capital controls, the ruble reacts poorly to Western assessments that the Russian Federation has defaulted on external borrowings,” said Vladimir Evstifeev from Bank Zenit.
Sergey Zvenigorodsky from Vector X believes that due to the strong imbalance in supply and demand for cash currency in Russia, the ruble against the dollar may well reach 50 in the next week, and this will be the lower limit of the corridor in which it will move further.
“This corridor can be designated as 50-70 rubles, with a gravitation towards its upper limit, which is more beneficial for exporters. The euro will stop its fall near the level of 52 and will also move to the upper border of the corridor of 52-75 rubles. Since the situation is not entirely market-oriented, it is difficult to talk about the timing of achieving one or another course, especially since an armed conflict can present any surprises at any moment. Much will depend on the effect of anti-Russian sanctions, which are introduced one by one, but the effect of which falls not only on Russia, but also on developed countries, ”adds the expert.
Dmitry Alexandrov from Ivolga Capital assumes that there will be no cardinal reversal of the trend in the coming days, there are no prerequisites for this. However, the need to support exporters and the gradual restart of imports will put pressure on the ruble in the medium term, he added.