The Russian Central Bank will hold the first auction to provide foreign exchange liquidity on October 29. As part of it, market participants must receive $1.5 billion for 28 days. During a similar auction scheduled for Thursday, its participants are expected to provide $2 billion for a week. The regulator hopes to support the ruble in this way. Macroeconomics Advisor to the General Director of the Otkrytie brokerage house Sergei Khestanov discussed the situation with Kommersant FM presenter Oksana Barykina.

— As far as I know, you think that it is too early to say how effective such measures of the Central Bank can be in terms of stabilizing the exchange rate of the Russian currency?

— The fact is that the Central Bank, when making specific decisions, is between two fires. On the one hand, it is obvious that it is necessary to at least slow down the depreciation of the ruble, on the other hand, spending on this the same resources that the Central Bank spent in the past is completely unacceptable. That is why the Central Bank is experimenting with forms that are relatively new to the market, namely: currency swaps and, accordingly, currency repo. It is still quite difficult to determine how effective new forms of ruble support will be, but, on the other hand, since the rate at which the Central Bank’s international reserves are being spent is quite high, this initiative of the Central Bank can only be welcomed.

— That is, we will choose from what will work best?

— Most likely, the main motive for the choice is not the “better” consideration, because it is clear that from the point of view of the immediate effect, interventions would be more effective, but from the point of view of what gives at least some effect in the absence of spending international reserves. The fact is that the rate of decline in reserves that we have observed in recent months is so great that it is clear to everyone, including market participants, that if the movement continues at this rate, then the international reserves of the Central Bank may decrease to dangerous levels.

— Is the currency shortage the main factor that weakens the ruble?

“This is one of the factors, and the reason why the ruble is weakening at such a high rate is that several factors are acting against the ruble. The first, trivial one, is the decline in the price of oil, which we have been observing for the fourth month in a row, the second is really a currency shortage, associated, first of all, with the need to make fairly large payments on external debts. This is a relatively new factor that has been in effect for only a few months, and the third, subjective factor, associated, on the one hand, with the rhetoric around sanctions, and on the other hand, with the reaction of market participants to this rhetoric. And all these three factors, unfortunately, play against the ruble.

— By the new year, what do you predict the indicators will be?

— Most likely, we will either remain at current levels or move down a little more in terms of the value of the ruble relative to major hard currencies. The fact is that the New Year itself is not a particularly important event for the markets, so the external factor will be more important here, the cost of oil, and the presence or absence of an escalation of sanctions rhetoric.

— What do you think will be the effect of what the Central Bank will do this week? When should we wait?

“I think that at least a month, or even a quarter, will pass before the market “tests” the effectiveness of the Central Bank’s new measures, and the Central Bank itself gains experience in using these measures. Like any new thing, at the beginning these will be quite cautious experiments, both on the part of the Central Bank and on the part of market participants, but as experience is gained, perhaps these new tools will become more popular. If this happens, then this will indeed become one of the forms of containing the weakening of the ruble without spending gold and foreign exchange reserves.

— Can we no longer hope that the currency will roll back somewhere?

— The fact is that, most likely, we will see some rollback in February-March next year, but this will not be due to the measures of the Central Bank, but simply to the fact that the calendar of payments on external debts is quite uneven, and minimum payments are at the beginning of the year , both this and next, and maximum towards the end of the year. Therefore, after the month of December has passed, when fairly large payments are due in January-February-March next year, the volume of this pressure on the market due to external payments will decrease, and this will naturally reduce the pressure on the ruble.

"The Central Bank's initiative can only be welcomed"