The ruble reservedly increase in the key rate

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The ruble reservedly raising the key rate by 0.25 PP to 7.75% per annum. The decision of the Central Bank is proactive in nature and is intended to limit the inflationary risks in the light of the VAT increase and volatile external conditions. In addition, the higher rate will support the domestic currency amid plans for the resumption of procurement under the budget rules.
An additional source of positive are denominated oil prices, which rose the day before after the publication of the report of the International energy Agency: the document is projected to decrease in the extraction of raw materials in the first quarter of 2019 because of the actions of OPEC, but also due to unplanned supply disruptions from Venezuela and Iran.
Dollar feels confident, however, lacks incentives for the transition to growth: the effects of the uncertainty before the fed’s meeting, which will determine monetary policy for the year 2019. “Hawkish” attitude of the regulator can push the American currency to strengthen.
Expected trading range for the coming week is of 65.55 – 67,55 RUB/USD.
Vladimir Zotov
Operating officer of the Treasury,