| The dollar fell to a six-year low in Russia The dollar exchange rate in Russia yesterday reached a minimum not seen since January 2000. The official exchange rate of the Central Bank decreased by 0.3%, from 27.51 to 27.43 rubles/dollar, and there seems to be no chance that the American currency will at least slightly regain lost ground. According to market participants, before the May holidays, the dollar traditionally becomes cheaper by 10-15 kopecks.
The fall in the dollar exchange rate (since the beginning of April has fallen in value against the ruble by 0.8%) is still associated with the weakening of its position on the world market. Yesterday, the dollar against the euro was trading at 1.237--1.241, although at the end of last week the quotes were 1.22--1.23. “The reasons for the weakening of the dollar are still the same,” says MDM Bank trader Pyotr Neymyshev. “This includes the high cost of oil on world markets, the expectation that the Fed will stop raising the interest rate, and finally, the large US trade deficit.” Statements by the heads of central banks of many countries about the decision to reduce the share of the dollar in their gold and foreign exchange reserves do not add optimism. As you know, last Friday the Bank of Denmark announced an increase of 15% in the share of euros in reserves due to the transfer of part of the funds (17%) from dollar assets. The Bank of Sweden promised to reduce the share of the dollar in foreign exchange reserves from 37 to 20% and increase the share of the euro from 37 to 50%.
Statements from Russian financial authorities also put pressure on the dollar. Thus, at the end of last week, Finance Minister Alexei Kudrin said that the instability of the dollar and the high US trade deficit call into question the status of the dollar as a global reserve currency.
So you shouldn’t count on even a slight strengthening of the dollar in the near future. However, according to market participants, the Bank of Russia, based on its current policy, will not lower the dollar against the ruble even further, as, for example, it was at the beginning of the year. In addition, the head of the Central Bank, Sergei Ignatiev, has repeatedly assured the public that for now his department will not fight inflation through the nominal strengthening of the ruble exchange rate.
According to Mr. Neymyshev, the dollar exchange rate before the May holidays will be 27.30-27.35 rubles. Elena Khrupova, an analyst at BrokerCreditService Investment Company, shares a similar opinion: “If the bleak trend on the world market continues, the mark of 27.35-27.30 rubles is not far off, this is a matter of a couple of weeks at most.” Natalia ROMANOVA |
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