Saturday, July 4, 2009

Morgan Stanley: the ruble will not be long

Morgan Stanley analysts believe that the strengthening of the ruble is unlikely to continue, despite the rise in oil prices, given the likelihood of interference with the Central Bank of Russia to protect its exporters. During the period from August 2009 to January 2010, Russia has spent more than a third of its foreign reserves to prevent a sharp depreciation of the ruble against the U.S. dollar. Over the past five months, the Russian ruble rose by 16% against the backdrop of rising oil prices (since 20 January, the price of oil rose more than twice). However, Morgan Stanley believes that even with the increase in oil prices, fragile position of many exporters and the weak state of the state budget are forced to carefully evaluate the likelihood of further growth of the ruble. The Bank believes that in order to prevent the strengthening of the national currency Centrobank "inevitably" will resort to the intervention. Bank Morgan Stanley strategists believe that in the second half of this year, Bank of Russia will allow ruble depreciated by 3.4% to 32.3 rubles to the dollar, given that low interest rates have a higher priority compared to a strong national currency. The bank also expects that the reduction of inflation to the first quarter of 2010 the refinancing rate in Russia will be reduced to 9%. The dollar / ruble currently holds about 31.25, when it should be noted that in the last few days has consistently supported a pair of 200-day moving average around 31.00.

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