The expert spoke about the factors supporting the ruble

© RIA Novosti / Vitaly to Belowaverage in potomacfever with the sign of the ruble on the show. Archival photoThe expert spoke about the factors supporting the ruble© RIA Novosti / Vitaly to Belowaverage the image Bank

The introduction of US sanctions against Iran could be one of the factors supporting the Russian currency, along with the suspension of regular purchases of foreign currency by the Central Bank of the Russian Federation and the possible return of foreign investors in Russian assets after the appearance of the concrete under the new sanctions regime, said the chief economist of the «Nordea Bank» Tatiana Evdokimova.

«A few days will enter into force sanctions against Iran, which is to ban imports of Iranian oil for other players. This factor may be potentially positive for the ruble, because the fact of sanctions can provoke some jump in the oil market, which could support the Russian currency,» said Evdokimova during the webinar, presenting an overview «Navigator. Calls the end of the year.»

According to her, the Bank revised the forecast of the ruble at the end of the year to 67 from 69 rubles per dollar and to 77,1 80 rubles per Euro. A key factor was the suspension of regular purchases of foreign currency by the Central Bank of the Russian Federation, which reduces the demand for currency in September-December for about $ 25 billion. This amount is sufficient to cover possible outflow of capital at the end of 2018 in the case of tougher sanctions.

Sanctions risks and signals from OPEC

However, mainly due to the risk of sanctions, the Bank expects a slight weakening of the ruble to the end of the year. At the end of November will come into force a second round of sanctions in the case Skrobala. As we approach that date it’s possible more nervous on the Russian currency market, and maybe some pressure on the ruble, which is likely to happen before the announcement of the sanctions.

According to experts, the US rhetoric of recent weeks suggests that the US measures are slightly less favourable, including the possible imposition of restrictions on export-import operations, but partial, not full, and the restriction on financial assistance from international financial institutions for the Russian Federation, which is not too painful factor for the currency market and macroeconomic stability of the country.

«The positivity we associate with the possibility of a return of foreign investors in Russian assets have, in fact, the announcement of the sanctions and withdrawing a high degree of uncertainty,» she said.

In December, a possible positive signal to the market on the background of the summit of OPEC, where it’s possible countries parties to the agreement will decide on a longer cooperation and the attempts of the long-term impact on the oil market. This could potentially be a positive for the ruble, the expert said.

Negative factors

Midterm elections in the U.S. Congress, the expert sees in a negative way for the Russian currency. «It is possible in fact of the election, as if they were not completed, we may see the accusation of Russia that was another fact of intervention, which in principle could trigger certain negative dynamics of the Russian currency,» she said.

In addition, according to her, there is a view that the democratic party of the United States, which is more likely to get a majority in the house of representatives, theoretically a little more negatively disposed towards Russia and has more reason to try again the American President to represent in a negative way, as a person, supporting Russia, and provoke new sanctions. «So, here I would rather say that the short-term this factor for the Russian currency negative,» she said.

According to experts of Bank, trade wars remain in the spotlight of the global stock markets and for a number of markets shows a downward trend on the background of increased risk and the us stock market and the European economy, and Chinese. «In this regard, we see still quite a lot of risks for the currencies of developing countries, which include Russia, and particularly vulnerable, we think, are the currencies of the Asian region that are heavily dependent on the performance of the Chinese economy,» — said Evdokimov.

The projections for 2019 is based on the strengthening of the ruble, but very modest in relation to current values. There is a risk of correction in the oil market, which is the main negative factor, but it will be well offset by the return of foreign investors after the definition of the sanctions, the expert concluded.

Source