Ruble: First, “black Monday”, and after “black Tuesday”
On Tuesday, the ruble continues to fall against the dollar and the Euro. The Central Bank still sees no threat to financial stability, and the government is thinking over how to help the disgraced oligarchs.
On Monday, many experts and market participants are looking at the quotations of dollar/ruble and Euro/ruble, agreed that the decline in the Russian currency market should be completed. However, after the “black Monday” was followed by “black Tuesday”.
Today at auction Moscow exchange in the morning, the U.S. currency rose to 63 rubles 95 kopecks, and the Euro reached the level of 78 rubles 77 kopecks with the supply for tomorrow. All this is accompanied by sales on the Russian market of public debt, some rebound in the stock market. Market participants wonder whether, in fact, what awaits the Russian market further.
By 12 o’clock Moscow time per one unit of American currency gave 62 rubles 30 kopecks, the Euro traded at 76 rubles 80 kopecks. The MICEX index has corrected to 2125 points, quotes of Brent crude oil has again surpassed $ 69 per barrel. Bitcoins according to the website CoinMarketCap is at the level of $ 6,700.
Even the most inveterate pessimists did not expect such a rapid depreciation of the Russian currency. Scary to think what will happen if this market reaction occurred in the first two days after the imposition of sanctions against several Russian companies. At the same time, the government is preparing measures to support the oligarchs. In particular, the Cabinet decided to revert to the question of the establishment of two offshore zones on island Russian and the Kaliningrad region.
The Central Bank said that threats to financial stability there.
The floating exchange rate of the Russian ruble is able to absorb the volatility that is present in the financial market. Now it is not clear exactly who out of the ruble. Maybe just implemented established earlier negative scenarios, possibly from Russia started to walk away private foreign investors who, in connection with the new sanctions will not be able to operate with a number of Russian companies. However, this could be a mass Exodus of carry traders from the Russian market. The worst of course, if you implement the latter option.
Previously, we have not once said, carry trade on the Russian market is a time bomb. If previously, foreign investors actively bought Russian bonds and stocks, investing in Russian rubles and helping to strengthen it, the withdrawal from the Russian market may lead to the opposite consequences. This sale on the Russian market of debt, the sale of the Russian stock market, and very significant and rather rapid weakening of the Russian currency. You need to understand that carry-traders are very long increased their positions in Russian assets, and the yield of these assets will be very fast, so the volatility can be extremely high.
The head of the analytical Department of the company,