Ruble: the Bank of Russia suddenly preoccupied with inflation

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The ruble started the week with declines on Wednesday and Thursday was able to considerably strengthen its positions against the dollar and other foreign currencies. Positive came, ironically, from Washington: it became known that the American authorities decided to postpone the tightening of anti-Russian sanctions. A review of geopolitical risks triggered an increased demand for OFZs from non-residents.
Additional support for the rouble has provided the beginning of the tax period. In addition, there has been a recovery of oil as investors expect OPEC will soon go to limit the supply to prevent the accumulation of excess. At the same time, quotes of “black gold” is holding back the increased production in the U.S. to a record 11.7 million barrels per day, while U.S. stocks of raw materials exceeded $ 442 million barrels, which is the maximum value from December 2017.
Finally, a positive effect on the ruble, the maintenance of the moratorium on the regular purchase of foreign currency by the Central Bank. According to Elvira Nabiullina, the regulator in deciding on the resumption of such purchases will take into account not the values of the exchange rate, and market volatility. Meanwhile, the Bank of Russia is concerned about inflation and the upcoming VAT increase.
Expected trading range for the coming week is 65,15 – 67,15 RUB/USD.
Vladimir Zotov
Head of Directorate of financial markets