The ruble strengthened too much in the opinion of the Central Bank of the Russian Federation at the beginning of 2018

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RF Central Bank on Friday lowered the rate to 7.25%, which is a stimulus for further development, but largely already priced in the Russian market. The Bank of Russia will gradually move to neutral policy, focusing on the goal of 4% annual inflation. The rate reduction will continue to occur as smoothly, Elvira Nabiullina did not rule out a pause with the adoption of such decisions, or one-time maneuvers, 0.25, or 0.5 %, leaving the different options are equally probable in the future.
Such measures should support the stock market, but will inevitably lead to a reduction in the attractiveness of the ruble, although its rate is projected to be within a stable price range. To balance the rate of the domestic currency will oil striving steadily to new highs, but the Central Bank is not willing to give her the controls and again shows about the need to write additional basis for a strong ruble and the Russian economy in the future, but not in the short term.
The ruble strengthened too much in the opinion of the Central Bank at the beginning of 2018, and intervention purchase of foreign currency serve only to replenish the budget, but at the cost of domestic currency is affected rather weakly. Tuesday will be like Monday pretty neutral, but with a small positive effect of the ruble. Its value will grow because of good demand for oil and continue the rally by foreign investors, because the statements published not all businesses can be earned, so small steps to strengthen remain the main trend.
Nikolay Shiryaev
“International financial center”