The ruble fell into the abyss
Detective story since yesterday evening the sudden collapse of the ruble 69,50 to the dollar, which did not save even the sheer drop of the oil in the oil storage tanks United States 4.3 million barrels while the forecast of decline by 1.3 million barrels – is starting to unravel. On the occasion of a major Fund sold foreign exchange rubles for $1 billion, much has been written and discussed, so there is no reason to continue to procrastinate this subject. It is clear that the ruble fell, because someone sold in large volumes. This banality does not answer the main question: for what reasons he did it and under what conditions it can happen again.
On the basis of such large discharges, the first suspicion of course fell on the Central Bank, which, as you know, increased rate of buying currency for the Ministry of Finance. Recall that from 7 September to 4 October, the Finance Ministry intends to spend a record 427 billion rubles (about $ 6.2 billion) to purchase foreign currency at the Central Bank according to the “budget rule”. And if earlier the Ministry of Finance purchased foreign currency through exchange, will now do it directly from the Central Bank – apparently in order not to sow confusion and panic among investors, bankers and importers. At the same time, the Central Bank promises not to sell the proceeds for rubles on the domestic market. Thus reasoned our colleagues – perhaps yesterday, the Central Bank decided “to finally shake the old days”, pressed the button and got the result. But this version was soon refuted by the bidders.
Further, traders have suspected something wrong in connection with the notorious “affair Skrypalia”. As you know, the British Prime Minister Theresa may has enlisted the official support and understanding on the part of depodesta USA, Germany, France and Canada in his accusations of Moscow’s involvement in high-profile espionage case and threatened more sanctions. However, a lot of trust and this version, in the end, not caused, because the English media no interest in the subject showed and even, in some sense, their silence gave us to understand that they are already fed up with the endless “notes of Sherlock Holmes”.
Finally sounded the chorus of “Eureka!” when it became clear that around 17:00 GMT in Washington began an emergency meeting of the banking Committee of the U.S. Senate on the issue of specific levers of pressure on Russia in the framework of the new package of sanctions. That’s already more than “hot” because as you know, in their list of famous restrictions against Russian state-owned banks for their USD correspondent accounts, and also not less popular “the ban on the purchase of government debt”. Many market experts in this regard is still haunted by the question “was it necessary to broadcast a closed and secret in fact discussed at the meeting – for everyone to see online?”
In the end, while the Russian ruble has got a little blood (as of 12:30 GMT, the Russian currency traded mostly flat around the level 68,90 to the dollar, although historical high against the Euro above 80, the ruble was not able to leave), and, as they say, the worst is behind us. We had a unique opportunity to see a good “rehearsal of the parade” as to how it will look notorious the worst of the sanctions scenario.
In General, the process is a two-hour discussion of American senators, among whom his eloquence was especially distinguished guest of honor of the event, former U.S. Ambassador to Russia Michael McFaul acknowledged that the sanctions against the Bank would be counterproductive, as it is the first person Herman Gref to see better ally to pressure on the Kremlin than of the enemy. Sanctions against oligarchs Deripaska and Vekselberg are not included in the list of 10 closest to Putin oligarchs McFaul, was reluctantly found to be ineffective (solid counter-productivity and inefficiency in the estimates, and this is only the beginning!). Consequently, the markets will be of special interest to the “list of anti-Schindler” McFaul, in the meantime, it would be reasonable to expect that the worst for RUSAL – behind (with all the consequences).
New in this debate – the rejection of the uniform horizontal pressure on the Russian economy (because, according to those present, the burden of hardships, in the end, “falls not on those” – namely, ordinary Russians, who are no longer sanctioned target audience). In this case, the population of Russia is United against the USA (amazing historical discovery!).
Now us senators have agreed to use the “impact method” (“should be hit like a laser surgeon”), and to a greater extent than previously to combine the “carrot” with the “carrot method”. In addition, they decided to look for a “gold party” more purposefully and diligently. A special role in this process will occupy arrests private”sacrament” of real estate around the world. States will move from sanctions “upon” sanctions “precautionary”, i.e., henceforth to enter them will be as for past faults and the future.
It was acknowledged that sanctions against Russia really hurt the US and its partners. But since “Russia should influence”, sanctions remain the most effective method of peaceful diplomacy. It was concluded that “the Russian economy has no future and lives only at the expense of raw materials.” While Russia is “ready to live forever in terms of sanctions”, although “Pension reform has undermined the people’s confidence in Putin.”
Summary it is possible to make such that all of the above is a small positive and not negative for the markets, as from now on sanctions should be more selective.
“International financial center”