Exchange Rate Of Russian Ruble Fell To Annual 'Bottom'
- 7.10.2024, 15:03
Currency is not coming in.
The Russian currency market continues to slide downward, despite the increase in interventions by the Central Bank and the jump in oil prices, writes The Moscow Times.
At the auction on Monday, October 7, the yuan exchange rate rose to the level of 13.59 rubles — the highest since October last year. The dollar in the over-the-counter market, according to LSEG, rose to 96.27 rubles and also set an annual record, and the euro fixed above 105 rubles (105.58 rubles).
Since mid-June, the ruble has lost more than 17% against the yuan, 15% against the dollar and almost 10% against the euro, and since the end of August, the devaluation has become almost unstoppable: the Russian currency has completed in minus six weeks in a row, which has never been seen on the stock exchange since the beginning of the war.
"A noticeable contribution to the weakening of the ruble was made by external restrictions that prevented the inflow of export foreign exchange earnings to the Russian market," notes Veles Capital analyst Yuri Kravchenko: due to the threat of US sanctions, payments for Russian companies are massively blocked by banks of friendly countries, including China, where, according to Reuters, tens of billions of yuan in transactions were suspended by the beginning of autumn.
Since the beginning of autumn, the Russian market has been experiencing an acute shortage of Chinese currency, and in October the situation worsened: because of the holidays, the Chinese markets are closed, and "there is no currency from abroad," said investment banker Yevgeny Kogan. At the same time, the demand for foreign currency from importers is growing, Kravchenko points out.
The end of the Chinese holidays (October 8) should increase the inflow of yuan to the Russian market, including for deferred sales, said PSB analyst Yevgeny Loktyukhov. However, the strengthening of the ruble, if it takes place, will be "local", the expert says.
The Central Bank is in a hurry to support the ruble, which in October will sell Chinese yuan for $1.3 billion — 32 times more than in September. This, however, is hardly able to stop the creeping devaluation: by the end of the year, the yuan may gain a foothold above 14 rubles, Kravchenko believes: this will be a new course record from March 2022.
American sanctions remain a threat to the foreign exchange market: on October 12, the license for operations with the Moscow Exchange, which has been blacklisted, expires. This means that Chinese banks, as well as their Russian subsidiaries, can stop all exchange operations, a source familiar with the situation told Reuters.
"The situation with yuan liquidity may become even more complicated," the source warns, adding that since September, payments from Russia to China have been stopped by Raiffeisenbank.
In the end, this may lead to the fact that after the dollar and the euro, yuan trading will also stop on the exchange, warns Finam analyst Alexander Potavin. In this case, "there will be no benchmark for the ruble exchange rate," he complains: "Quotations of the yuan will be determined on the basis of transactions in the interbank market, which is absolutely opaque and subject to manipulation."