Translated material
Strengthening by 10 kopecks
The Bank of Russia weakened world currencies
The ruble exchange rate rose by about 10 kopecks yesterday . to the dollar and the euro due to its strengthening to the bi-currency basket, which the Central Bank undertook for the second time in a year. On international markets, the dollar fell again amid rising oil prices caused by reports of a missile test in Iran.The Bank of Russia set the official dollar exchange rate for July 10 at 23.4147 rubles. up from 23,502 the day before. The euro also fell in price, its rate dropped to 36.7822 rubles. from 36.8823. The ruble exchange rate against the bi-currency basket at the opening of trading strengthened from 29.52 to 29.43 rubles. This led to increased volatility in the foreign exchange market and caused a wave of profit-taking in short positions. As a result, by the end of trading the ruble exchange rate to the bi-currency basket stood at 29.48, and during the day it dropped to 29.42 rubles.
The current strengthening of the ruble is the second in a row this year. As already reported, on June 10, as part of the fight against inflation, the Bank of Russia raised the ruble, calling it a “symmetrical expansion of the boundaries of the technical corridor of the bi-currency basket,” within the framework of which it conducts regular currency interventions.
Meanwhile, on world markets, the US currency experienced a correction. In the morning at Asian trading, the dollar fell in price against the euro from 1.5665 to 1.5683. This was facilitated by another jump in oil prices, which fell by almost $5 per barrel on Tuesday and Wednesday, and rose by about $2 per barrel yesterday afternoon. However, by the evening there was a correction in the oil market again, and as a result, during the day the growth in both Brent and WTI amounted to no more than 50 cents.
At the G8 summit that ended yesterday, the leaders of the countries did not touch upon the topic of the dollar exchange rate. However, French President Nicolas Sarkozy said that “all participants in the meeting agree that a weak dollar is harmful for the global economy.” At the same time, the eurozone financial regulator is still concerned about the exchange rate of its own currency. European Central Bank President Jean-Claude Trichet defended the bank's decision yesterday to raise the key rate from 4 to 4.25% per annum, again noting that he was closely monitoring the likelihood of spiraling inflation. “Risks to price stability in the medium term are clearly growing and have intensified over the past months,” he told the European Parliament. “The Governing Council is seriously concerned that price and wage policies may exacerbate inflationary pressures.” In turn, the European Parliament called on the ECB to be careful with further interest rate increases, as this could cast doubt on economic growth.
The net demand of the Russian population for cash euros in May decreased by 2.5 times compared to April, to 300 million in dollar equivalent. "In May, there was a significant decrease in the activity of the population in the cash foreign currency market, which is usual for this month. As a result of a faster pace of decline in supply over demand, a positive balance of transactions of individuals (net demand) was formed. However, the volume of net demand for the euro decreased to a minimum values in 2008,” says the Central Bank’s review. Authorized banks imported cash foreign currency into the country in the amount of $700 million in May, which is 27% less than in April. Imports of cash euros decreased by 34%, while the volume of imported dollars remained virtually unchanged. RIA Novosti