Ruble in medium term may appreciate by another 10% - VTB first deputy
DAVOS. Jan 18 (Interfax) - The ruble, according to the favorable scenario, will appreciate by another 10% in the medium term, VTB First Deputy CEO Yury Soloviev, who is responsible for investment block's work, said.
"Proceeding from these basic prerequisites, we think that the ruble will grow in the medium term. We are looking at dependence on oil, the ruble to the dollar rate is 55-65 rubles. From [the present], it may rise by 10%," he told journalists on the sidelines of the World Economic Forum in Davos
The Central Bank set the dollar's official rate as at January 18 at 59.40 rubles, for January 19 it was reduced to 59.18 rubles. The euro's rate fell from 63.29 rubles to 63.23 rubles.
Soloviev said that the oil price, according the VTB Capital's forecast, would slightly grow, it is expected around $40-$50 a barrel or $45-$55 per barrel.
He said that in Russia real interest rates remain one of highest in the world, which will facilitate capital inflow. "We are hoping for an increase in carry trade, for the reduction of rates, for growth of [the Russian] currency against the main, base currencies. The current balance is positive," he said.
VTB Capital is also expecting in 2017 an increase in investments in the shares of Russian issuers. "We believe in the fact that this year should be the year of shares in Russia. [...] We think that this year many funds will transition to shares," the first deputy CEO said.
In addition, he said that risks for the ruble include the possible tightening of monetary policy in the United States, and also a slowdown in growth rates in China.
VTB head Andrei Kostin noted the ruble exchange rate's dependence on oil prices. Risks in this area, many experts said, are connected with the possible drop in oil prices due to the agreements on reducing production not being met and the potential rise in the production of shale in the United States.
