The dollar exchange rate at trading on the Moscow Exchange has updated its minimum since the end of July, falling below 91 rubles/$. This was facilitated by the stabilization of oil prices and increased requirements for exporters to sell foreign currency earnings. As tax season approaches, the dollar exchange rate may drop below 90 rubles/$. However, at the end of the year, against the backdrop of rising government spending, the ruble may not hold its position.
On November 14, the dollar exchange rate on the Moscow Exchange with “tomorrow” settlement fell below the level of 91 rubles/$ for the first time since the end of July. During trading, it reached 90.38 rubles/$, by 1.2 rubles. lower than the close of trading on November 13. At the end of the day, the exchange rate of the American currency stood at 90.5 rubles/$. During the trading session, the euro dropped to the level of 97.23 rubles/€ (more than 80 kopecks lower than the close of the previous session), but ended trading at 98.1 rubles/€, or 7 kopecks. higher than the close on November 13 (against the backdrop of the weakening of the US currency on the world market). Yuan trading closed at RUB 12.47/CNY, the lowest since July 12.
A rather sharp decline in quotations of major currencies against the ruble occurred with weak activity of market participants. The volume of dollar trading with settlement “tomorrow” did not exceed 80 billion rubles. This result exceeds the results of the two previous sessions, but in August-October the daily trading volume often exceeded RUB 100 billion. The volume of yuan trading exceeded 122 billion rubles, although at the beginning of November it noticeably exceeded this figure, and at the end of October reached 223 billion rubles.
The market is partly supported by the stabilization of energy prices after a noticeable decline in beginning of the month. This can be considered a positive factor for the ruble, notes Vladimir Evstifeev, head of the analytical department of Zenit Bank.
According to Investing.com, Brent oil prices on the spot market, after falling below $80 per barrel last week, have risen noticeably in recent days and are now above $83 per barrel.
Spot oil price Urals is approaching $70 per barrel. A gradual increase in the inflow of foreign currency into the Russian Federation from exporters, according to Mr. Evstifeev, will contribute to the continued gradual strengthening of the ruble.
In the coming months, the Russian foreign exchange market will only be affected by the mandatory sale of export proceeds introduced by decree, says Alexander Potavin, an analyst at Finam Financial Group. From mid-October, for six months, a number of Russian exporters will be required to place at least 80% of foreign currency earnings in Russian banks, and then sell at least 90% of this volume on the domestic market. In case of refusal to convert the currency into rubles, exporters will have to give up 75–100% of the “hidden” proceeds. “This factor stimulates an increase in foreign currency sales at the end of the year, which already has a positive effect on the position of the ruble,” believes Mr. Potavin.
The lack of growth in trading volumes in most currencies of friendly countries can be partly explained by the slowdown in demand for imports as a result of the recent weakening of the ruble and the increase in the key rate of the Central Bank, which led to an increase in the cost of retail loans, Mr. Evstifeev believes. “The yuan remains one of the main foreign currencies within the Russian Federation and will likely continue to take part of the reserve currency market at a moderate pace,” the expert added.
The ruble strengthening trend may continue until the end of the month, including with the approach of the next tax period, says Dmitry Babin, an expert on the stock market at BCS World of Investments.
As a result, the dollar exchange rate may drop to 89.7 rubles/$.
However, in December, according to the analyst, the ruble may resume moderate weakening, since this month is traditionally one of the most negative for the Russian currency, including due to increased spending by the state and citizens at the end of the year.
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