Translated material
From words to deeds
The Central Bank sent the ruble to the upper border of the basket
The dollar exceeded 30 rubles for the first time this year. Following the results of yesterday's session, the official exchange rate of the American currency against the ruble increased by 35 kopecks, to 30.0946. The value of the ruble decreased due to external conditions and statements by the management of the Bank of Russia about a possible fall in the domestic currency. Considering the situation on the oil market and the behavior of the Central Bank, analysts believe that the ruble may remain above this level for a long time.After US President Barack Obama's statements about the need to limit banking activities, world markets began to fall, and oil prices settled below $75 per barrel. Yesterday, WTI oil fell by $0.22 to $74.32 per barrel, and Brent fell to $72.89.
This could not but affect the dynamics of the Russian currency. In addition, the first deputy chairman of the Central Bank, Alexei Ulyukaev, put pressure on the ruble, saying on Friday evening that this year it is possible that it will fall to 38 rubles, the upper limit of the floating three-ruble corridor of the bi-currency basket. At the same time, Mr. Ulyukaev emphasized that until now the mechanism of currency interventions has not been used near the upper limit of the floating corridor. According to him, in January the Bank of Russia bought several hundred million dollars on the market, and on Friday - several tens of millions, restraining the growth of the ruble.
Against this background, the ruble's quotations against the bi-currency basket, in which the dollar's share is 0.55 and the euro's is 0.45, fell yesterday by mid-day by 25 kopecks, to 35.67 rubles. “Ulyukaev’s statement may mean that in the near future the Central Bank will increase the volume of foreign exchange interventions in order to push the ruble to the upper limit of the floating corridor, currently set at 38. In our opinion, these are rather verbal interventions aimed at preventing the strengthening ruble But since monthly tax payments end this week, and demand for risky assets has recently remained quite low, the ruble may sink even without the help of the Central Bank,” according to VTB Capital analysts.
Earlier, Mr. Ulyukaev noted that the Bank of Russia “will be able to implement a floating ruble exchange rate.” “This is a normal model, we have proven its worth to society and decision makers... I believe that in any circumstances we will succeed,” said the first deputy chairman of the Central Bank. “However, given the fact that oil prices have mostly remained stable since May last year, when a floating exchange rate was introduced, and when they left the corridor of $64--74 per barrel, the Bank of Russia had to make serious border interventions, to these words must be treated philosophically,” notes the “New Course” bulletin of the Development Center and the Higher School of Economics, edited by Sergei Aleksashenko. -- Just because "decision makers" allowed the floating course to be played with in a lake (where the concept nearly sank), it does not follow that the concept is sustainable in the ocean. We positively assess the Bank of Russia's intentions to increase its information transparency - this will allow economic agents to more confidently build their medium-term plans. But it is not yet clear how informative the planned transparency will be in conditions when “decision makers” have a great influence on monetary policy.
Russian financial authorities may delay free float of the ruble because regulators believe the economy is not yet ready for unregulated currency trading, according to Citigroup analysts. "Russia will likely return to some form of the managed exchange rate regime that was in place before the crisis to limit fluctuations that harm the economy," said Elina Rybakova, an economist at Citigroup in Moscow. “There is a possibility that hydrocarbon prices will drop to $68-72 per barrel, and this is increasing in light of the latest statements by the US President, because oil is still one of the favorite speculative instruments for the largest players. This means that there is a high probability that the exchange rate of the American currency will remain above the 30 ruble mark for a long time,” says LT Group analyst Vladimir Abramov.
VTB Capital experts are more optimistic: “We maintain a positive view on the dynamics of the Russian currency, predicting its strengthening this year to 28.08 rubles. relative to the dollar and 33.14 rubles. to the euro."
The Central Bank predicts an increase in bad loans to 11%
The share of overdue debt of Russian banks by the middle of the year may increase to 9-11% of the loan portfolio based on the current trend, and then it is expected to decrease, Alexey Simanovsky, director of the department of banking regulation and supervision of the Central Bank, said in an interview with RIA NOVOSTI . "According to the trend, by mid-2010, the volume of overdue debt shown by banks may amount to about 7% of the loan portfolio according to RAS. If we add to this 1-2% of maternity overdue, which was not officially shown by banks until July 1, 2010 in accordance with the instructions of the Bank of Russia No. 2156-U “On the peculiarities of assessing credit risk for issued loans, loans and similar debts,” and also add another 1-2% of hidden arrears, then 9-11% of the portfolio can accumulate,” says a member of the council directors of the Central Bank. According to Sberbank President German Gref , the overdue debt of Russian credit institutions this year will be no less than 20% of the loan portfolio.