The ruble started the week with strengthening and does not expect surprises from CBR

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At the start of the next week of October, the Russian ruble continues to gradually strengthen in a basket of currencies. The US dollar by mid-day trading on 65,32 RUB and decreases by 0.25%. Euro retreats of 0.3% and is 75,15 RUB Courses of the Bank of Russia on Tuesday, 23 October, makes 65,30 RUB per U.S. dollar (reduced by 51 penny) and RUB over 75,37 euros (raised to 5 cents).
The commodity market looks neutral. A barrel of North sea Brent costs $79,91 and increases by 0.1%. While the market is not configured to act on Friday, statistics from Baker Hughes number of rigs in the US (+4 units) is already reflected in the price, but new and interesting for market information has not yet been reported.
Next Friday, the CBR will hold a regular meeting at which a decision will be made at the level of the key rate and the conclusion of the monetary policy (DCT) of the regulator. The question of what to do now, the Bank of Russia, for the market is essential. With the big share of probability it is possible to say that the rate will remain unchanged at 7.5% per annum. There is the possibility for a rate hike in the medium term, if the inflation component will move up ahead. A chance too, because ahead of possible tightening of sanctions against the Russian Federation (November) and the increase in VAT in the country (January).
Obviously, to soften the OST now and in the next six months clearly, no one will. For the ruble it is neutral, as few expected a new wave of lower rates and loan costs.
The U.S. dollar closed the session Monday within 65,10-of 65.55, the Euro and finish in the borders of 75.00-75,55 RUB.
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Anna Bodrova,
Senior analyst,
Alpari