“Comments about currency purchases represent the latest verbal intrusion, of which there have been many,” Dmitry Polevoy, strategist at LockoInvest AM, says in a note to clients. “The market (yet) does not believe in this, more concerned about sanctions and dumping of foreign currency.”
The ruble strengthens for the second day in Moscow, adding 1.6% to 56.55/$. While the ruble may remain in the 58-60/$ range for now, it should weaken to 65/$ by the end of the year, and sanctions against the National Settlement Center could increase exchange rate volatility, Polevoy added.
“Fundamentally, export-import flows are more important for the ruble, and the tightening of sanctions may affect both.”
The ruble gained 0.8% against the yuan to 7.9570 and gained 0.4% against the euro to 54.8025. Russian government bond index: -1% to 126.95. The Moscow Exchange Index fell for the first time in three days by -1.6% to 1932.73. Brent +0.4% to $89.67 per barrel.
The threat of sanctions restrictions on transactions with the currencies of unfriendly countries is supporting the ruble, said BCS Express expert Dmitry Babin.
The ruble „is still protected by a large supply of foreign currency from exporters and unstable demand from importers, which is still not enough to weaken the ruble,” the analyst writes. „The threat of sanctions restrictions on transactions with the currencies of unfriendly countries is pushing many individuals and legal entities to get rid of it. This provides additional support to the ruble,” the expert emphasizes.
The departure of the dollar / ruble currency pair above the level of 59 rubles / $ 1 is unlikely even against the backdrop of the completed tax period and verbal interventions due to ongoing concerns about Western sanctions, analysts at Bank St. Petersburg believe. The dynamics of the national currency at the current moment will be largely determined by geopolitical news, experts note in the commentary.