The ruble is under pressure from threats of new sanctions
On Friday the ruble traded lower, despite the fact that the widespread pressure on the dollar persists, and oil continues growth, winning a mark of 67 dollars per barrel Brent. After yesterday’s drawdown in the area of 62,70 RUB, USD / ruble returned to the test match 63 RUB, adding since the beginning of the session a quarter of a percent.
The reason for this behavior of the Russian ruble is the resumption of talk about sanctions in respect of debt of the Russian Federation. The house of representatives approved an amendment to the draft defense budget for fiscal year 2020 that provides for the imposition of sanctions against the Russian debt due to the alleged interference in the American elections. Those messages were enough to trigger profit taking, especially because the current levels for more than attractive, and “the factor of Friday” just completes the picture.
Other bills of this kind, which has been repeatedly stated by White house officials, was postponed. It is possible that this time the threats will be limited to words and to deeds will not come. But the mere mention of the restrictions after a long pause creates discomfort in the ranks of market participants, and therefore, in the short term the weakening of the ruble and Russian assets in General can be developed. The pressure on our currency limits the growth in oil prices combined with a weak dollar in the Forex market, and next week the ruble will begin to feel the support of the tax period.
______________________ Gennady Nikolaev
Academy of management Finance and investment