10.08.2022
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The expert assessed the possible weakening of the ruble during the monthly intervention

MOSCOW, June 29 – PRIME. Monthly foreign exchange interventions in the equivalent of $10 billion will be able to stop the strengthening of the ruble, but it is unlikely to weaken it in a situation with such an influx of foreign exchange earnings, Sergey Suverov, an investment strategist at Arikacapital, estimated for RIA Novosti.

The euro fell below 53 rubles, the dollar – below 51 rubles

Earlier Wednesday, Finance Minister Anton Siluanov said that he considers it possible to donate part of the budget funds in 2022 to foreign exchange interventions, but so far there has been no final decision. He added that this would have to affect the exchange rate of the ruble. On Wednesday, the dollar and the euro again renewed multi-year lows: the dollar fell to almost 50 rubles (for the first time since May 2015), the euro to 52.7 rubles (for the first time since October 2014).

“The government has already outlined the border, which it considers optimal for the ruble exchange rate – this is 70-80 rubles per dollar. But taking into account the fact that there is a huge surplus of the trading account and an overhang of foreign exchange liquidity on the market, in order to restrain the strengthening of the ruble with the help of foreign exchange interventions, not so small funds will be required. The optimal equivalent is 10 billion dollars a month that will need to be allocated for such foreign exchange interventions,” Suverov said.

Given that this year’s budget will be in deficit, the sources of funding for these foreign exchange interventions are not clear, he adds.

“It will require quite a lot of money. Taking into account if at least $10 billion a month is spent in the equivalent of such an amount, then it may be possible to stop the strengthening of the ruble, but it is also difficult to weaken it greatly, while such a situation with the inflow of foreign exchange earnings. But it is possible to stop with the help of interventions,” the expert said.

In his opinion, the yuan, the Turkish lira or some other currencies can be chosen to stabilize the ruble through cross-rates, that is, to bring the dollar and euro to the ruble in a more adequate state.

“While there remains a very strong trend towards the strengthening of the ruble, it is possible that the dollar will break through the level of 50 rubles and go a little lower, but a lot depends on the actions of the government, what decisions will be made on interventions,” he summed up.

Source: 1prime

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