Bank Koltso Urala: Ruble to grow weaker in the medium term

June 26, 2014. The US dollar exchange rate dropped to below 34 RUR per dollar and stood at 33.65 RUR last Monday. The same minimum was observed in mid-January 2014, Bank Koltso Urala reports.

According to the head of the bank’s Currency Transactions Deparment Igor Nesterovitch, the ruble mainly grew stronger due to the positive news inflow (ceasefire in Ukraine’s South East, Europe’s ‘mild’ sanctions towards Russia, and recalled permission for the Russian troops to enter Ukraine) and the current fiscal period which stimulates demand for rubles.

Nesterovitch feels, nevertheless, that the ruble is likely to grow weaker in the medium term.

‘This will be brought about by the US’ new sanctions against Russia, by possible changes in the oil prices after the US permits export of its crude oil, and by the fact that a weak ruble is actually good for the stalled Russian economy. The probable target figures for the exchange rate in the coming month are the ones that go back to the 34.5-35 RUR per dollar range. The euro will probably be going towards 47 RUR per 1 euro,’ the expert said.

Other materials on the topic::