Stabilization of the ruble exchange rate began to occur against the backdrop of media reports about negotiations between the Russian and American parties on measures to reduce oil production and refining volumes, I told FBA “economy today” Head of “Finance and Economics” Institute of Contemporary Development, economist and political scientist Nikita Maslennikov.
The Russian national currency has risen noticeably against the US dollar amid positive fluctuations in oil markets. Measures also help stabilize the ruble, adopted by the main regulator of Russia.
“The Central Bank has its own stress scenario, implying the price of Urals oil in $25 per barrel. As soon as the price began to fluctuate, The main regulator sharply increased sales of foreign currency to the maximum since such interventions began in March – total sold currency equivalent 16 billion rubles, or $200 million.
These are quite big sales. Everything has been done to support the ruble in the range of fluctuations of the ruble against the American currency from 75 to 78 rubles per dollar", – comments agency interlocutor.
Now, economist notes, there is a rather strange rebound in oil – today the price of a barrel of Brent reached $31,28. At the beginning of the week the price dropped to $22 per barrel. This indicates, that markets actively react to news.
Recall, President of the United States of America Donald Trump reported, that he expects a significant reduction in oil production by Russia and Saudi Arabia after a telephone conversation between representatives of the two countries. According to him, reduction may reach 10-15 million barrels.
“It is quite possible to expect the administration of the American president to make a decision to reduce import volumes and use only its own resources.
The discussion about this went on for several days. In this regard, the head of the US Department of Energy, Dan Brouillette, unequivocally spoke about, that it is necessary to take measures to support the industry due to the threat of bankruptcy”, – the expert.
U.S. Energy Secretary Dan Brouillette held productive discussions by telephone on Tuesday with the head of the Russian Ministry of Energy, Alexander Novak.. Industry representatives from the two countries discussed the situation on global oil markets and agreed to continue the dialogue.
“In any case, the parties began to take some measures to stabilize the price of oil or contain it. Now there is a meeting between Donald Trump and representatives of oil refining and mining companies in the United States of America, as well as negotiations between OPEC+ ministers 6 April via videoconference”, – noted the economist.
Nikita Maslennikov, discussing the prospects for upcoming dialogues, suggests, that American enterprises will limit the volume of imports, and mining.
“The issue of the size of the cuts is still debatable. Some experts suggest a decrease by 20%. But the decision will be made later. Now we can only observe the corresponding reaction of the markets.”, – said the source.
The ruble is trying to strengthen following changes in markets
Russian national currency in the first hour of trading 3 April 2020 year on the Moscow Exchange has risen significantly in price against the United States dollar and the euro.
So, the dollar increased by 20 kopecks to the previous close to 77,45 ruble. The euro exchange rate fell by 21 a penny, reaching the mark in 83,65 ruble.
"Certainly, The main factor behind this growth of the ruble was the sharp rise in oil prices against the backdrop of statements by US President Donald Trump and messages from Saudi Arabia about convening an emergency OPEC+ summit..
Next you need to watch, how oil markets will react to events and upcoming dialogues between OPEC+ ministers”, – explained Maslennikov.
Markets are in a volatile state
Economist Nikita Maslennikov focuses on the fact that, that world markets, despite the positive response, are in a very unstable state – You can expect a sharp jump upward, and sudden descent.
“This phenomenon will be temporary, since to remove the overhang of offers due to increased volumes of oil supplies to markets through efforts “big three” almost impossible, but it is quite possible to relieve its pressure.
The picture will become clearer closer to the moment, When will the coronavirus pandemic peak?, and the world economy is stabilizing, starting to restore demand for oil”, – the expert added.
Central bank 27 March decided to set the official exchange rates of foreign currencies to the ruble and discount prices for precious metals for a week in advance, ie until 6 April 2020 , inclusive.
According to the calculations of the main regulator, the value of the dollar in the specified time period will be 77,73 ruble, and euro — 85,73 ruble. This decision of the Central Bank is associated with long holidays, which were announced by the President of the Russian Federation Vladimir Putin.
“The main regulator will continue to stabilize the Russian currency until the end of April 2020 year in connection with the message of the head of state on the extension of non-working days.
But I guess, that average annual oil prices will not return to a higher level $40 per barrel. For Russia such prospects, of course, not pleasant, but not critical – the country will leave with a deficit of about 1,5-2%, which is a small loss. If OPEC+ countries manage to temporarily fix oil prices at a level acceptable under existing conditions, then the ruble will continue to respond positively to market trends.”, – He stated the expert.
Alexander Melnik
