VIEWPOINT: improved FX liquidity balance to enable exchange rate smoothing up to year-end - Rosbank
MOSCOW. Nov 13 (Interfax) - "On Monday, the Russian ruble rebounded from its low mark on Friday, fluctuating in the range 67.5-67.8 rubles/$1 and 75.9-76.3 rubles/EUR1. Ruble strengthening against the European currency was driven by euro weakening globally. Simultaneously, the temporary stabilization of the USD/RUB pairing remains extremely unstable against the backdrop of oil market volatility. At the close yesterday, the price of Brent crude dropped to $69 per barrel amid complaints from the U.S. president about overly high oil prices and statements from the International Energy Agency about the restart of oil production in the Saudi-Kuwaiti Neutral Zone. Nonetheless, in terms of fundamentals, support for the ruble remains strong. According to Central Bank data, the current account surplus increased by $12.1 billion to $87.9 billion since the beginning of the year, while the outflow of private capital increased by $10.3 billion to $42.2 billion, witnessing to an improvement in the FX liquidity balance in the absence of interventions by the Central Bank, which says that support for the surplus is not just the result of high oil prices, but also reduced imports amid ruble weakening. We expect that the growing current account surplus will make it possible to smooth fluctuations in the ruble exchange rate until the end of the year (SGe: USD/RUB 66 in Q4 2018)," Rosbank said.
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