08 August 2018, 14:35 / Updated 08 August 2018, 20:12 / Finance

The dollar rose to a two-year high

Due to the publication of details of the bill on sanctions against Russia, the ruble has weakened sharply Anna Tretyak

The dollar rose to a two-year high / Maxim Stulov / Vedomosti

On Wednesday, the ruble weakens sharply on the Moscow Exchange. By 13.40 Moscow time, the dollar exchange rate increased by 1.15 rubles. up to 64.6 rub. – this is the maximum value since November 2016, if you look at the closing price. The euro strengthened by 1.36 rubles. to 74.93 rubles, exceeding the threshold of 74 rubles. for the first time since early May.

By 19.45 Moscow time, the dollar exchange rate had risen to 65.14 rubles, updating the trading maximum since the beginning of the year (65.06 rubles on April 11). The euro exchange rate rose to 75.55 rubles.

The main pressure on the ruble came from statements about upcoming sanctions, says Alfa Capital analyst Daria Zhelannova. Taking into account the fact that market activity is low in the summer, any announced initiatives immediately affect the exchange rate, she notes. The published details of the bill became a key factor, agrees BCS senior analyst Sergei Suverov: it turned out that the sanctions would affect both the energy sector and operations with Russian government debt, as well as Russian state banks.

The Protecting American Security from Kremlin Aggression Act of 2018 was introduced in the US Senate on August 3. On Wednesday, Kommersant published details of the bill with reference to the text of the document. According to Kommersant, the bill provides for a ban on operations in the United States and the freezing of the assets of seven Russian banks, including Sberbank, VTB , Promsvyazbank and VEB. It also includes a ban on transactions with Russian government debt with a maturity of more than two weeks - but only with new issues.

There is an understanding that sanctions will still be strengthened in one form or another, notes Raiffeisenbank analyst Denis Poryvay. “If the worst-case scenario comes true and banks such as VTB or Sberbank are included in the SDN list , it is likely that the ruble will weaken on the scale of 2014,” he fears.

However, it is necessary to note that for now this is still only an initiative, Zhelannova emphasizes, pointing out that the US Senate does not always implement the announced bills in full. “There is no one hundred percent probability that the bill will be adopted in its current form,” agrees Suverov. In his opinion, further fluctuations in the exchange rate will continue to be tied to geopolitics and will depend on how the bill passes in the US Congress.

In addition, we must not forget about the fundamental factors that traditionally influence the exchange rate, Poryvay reminds: these are dividend payments, foreign exchange interventions of the Ministry of Finance, as well as the end of the tax period and, accordingly, a decrease in foreign currency sales.