UBRD: Ruble Only Weakens Temporarily

9 August 2019 (09:10)

UrBC, Yekaterinburg, August 9, 2019. The Ural Bank for Reconstruction & Development's Treasury Director Vladimir Zotov says in relation to the weakening of the Russian ruble:

'The U.S. Federal Reserve System announced the dollar key rate would go down by 0.25% last week. Now the market players expected the key rate to keep going down and the FRS to tone things down a bit, yet, contrary to all expectations, the FRS said at a press conference that the U.S. economy was going strong and the key rate would not be going down in stages any further. The market response was a dramatic one: the U.S. Dollar sold for RUB 63.91 per dollar (+0.45%) and the Euro sold for RUB 70.73 per euro (+0.33%) on August 1. Quite a few analysts said the ruble was weakening drastically; in point of fact, however, this weakening is only temporary.'

Zotov believes the ruble stopped weakening and started growing stronger almost as soon as the following day, since the FRS's key rate does not affect the Russian national currency in any significant way.

Now the U.S. Dollar grew 4%, or RUB 2.5, more expensive since mid-July; the Euro grew 3.6%, or RUB 2.6, stronger. As of 3PM today, the stock exchange rates are RUB 65.22 per dollar and RUB 73.11 per euro.

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