Tightening interest rate policy of the Central Bank has not met the expectations of investors who very much were counting on the change in exchange its rate policy. In the evening of 31 October, the dollar sagged to a sharp increase in the key rate of the Central Bank, again rose above level 43 rubles/$, while the euro broke the mark 54,50 RUB/€.
The decision of the Bank of Russia about raising the key rate immediately by 1.5 percentage points was, of course, unexpected, but not enough sufficient to stabilize the ruble. Immediately after the announcement of this decision the quotations of the dollar on the Moscow stock exchange fell by more than 50 kopecks $ 41,58 rubles/$. The euro at the same time was failed to mark 52,43 RUB/€, losing almost 60 kopecks However, after a few minutes the dollar and the euro returned to the level prior to the announcement. Growth of courses was accelerated at 15:00. At 16:40 the dollar rose to the level of 43,06 RUB/$, 1.5 rubles above the close on Thursday. The euro by this time increased to 2 rubles to mark 54,50 RUB/€. To 18:00 courses of the dollar and the euro has stabilized near the mark 43,98 rubles/$ and 53,73 RUB/€.
In early trading Thursday, 30 of October, on the Moscow exchange, the dollar has reached historical maximum, for the first time surpassing the level 43 rubles/$. The euro was rose to the level of 55,50 RUB/€. This was due to the decrease in the sale of foreign currency earnings Russian exporters, as well as fears that the regulator may suspend foreign exchange intervention. But then sales of foreign exchange by the Central Bank caused a sharp appreciation of the ruble: the dollar collapsed to the level of 42 rubles/$, Euro sank to the level of 53,63 RUB/€.
As a result of sharp growth of prices, that occurred in early trading, the dollar on the Russian market for the first time in history exceeded the level 43 rubles/$. At 10:10 by Moscow time at the auction of the Moscow exchange rate of the American currency has reached 43,66 RUB/$, which is 85 kopecks above the close Wednesday. However, to stay at that level failed, and by 12:30 the rate was fixed at the level 43,38 rubles/$. A similar pattern was observed in the auction of Europe’s currency. At the beginning of the trading session the euro for the first time exceeded the level 55 RUB/€, up to the level of 55,50 RUB/€. To 12:30 by Moscow time the rate fell to 54,55 RUB/€.
The ruble against the dollar and euro on the Moscow stock exchange soared to 6%, interrupting the steady decline that lasted for two months. Traders say about the market saturation currency, suspect the Central Bank in interventions, which frighten speculators, and warn that after the transition to the floating exchange rate of the ruble such jumps may become the norm.
The Central Bank did not comment on the sharp appreciation of the ruble.
“The regulator adheres to generally accepted practice in the world “week of silence”, implying the absence of public comments and statements on issues of monetary policy during the week prior to the meeting of the Board of Directors on the issue of the key rate. Market participants pay attention to the official comment on matters of monetary policy and could over-react to it, which can cause excessive volatility in the financial market,” said in CB.
The ruble in early trading continued to depreciate against the dollar and two-currency basket, reflecting the decision of the fed to end QE and continuing the downward trend of the local market before the meeting of the Russian regulator, despite the fact that the first auction of foreign currency repo confirmed there isn’t of dollar liquidity.
Quote of the ruble against the two-currency basket by 10.35 GMT are at the level of 48,50 ruble, basket value increased by 16 cents.
Dollar calculation “tomorrow” was increased by 23 kopecks to 43,43 of the ruble compared to the previous day’s close, the Euro is growing by 6 cents and worth 54,70 ruble.
Foreign companies can stop the production of essential drugs for Russia. Prices have not changed for four years.
Prices of listed drugs are regulated by the government: the Ministry of health in coordination with the Federal tariff service (FTS) registers the maximum selling prices of the manufacturer; the regions set the wholesale and retail mark-UPS. By foreign manufacturers recorded rates based on weighted average rates of import preparation for the second half of 2009 and prices in 21 reference country. In 2010, prices were registered in rubles. Since then they have not been reviewed – the current method of setting prices for vital and essential medicines does not allow foreign producers to do this, write “sheets”.
Index of production orders in Germany has fallen significantly, and this may give a reason for the specialists to talk about risks of slowing down the rise of the biggest European economy. This index fell in August current year to 5,7% with adjustment of seasonal alterations and inflation, meanwhile it rose in July to 4,9%, according to published report. Surveyed economists suggested decrease to 2,5% according to Bloomberg agency. Annually it is also was recorded that decrease was up to 1,3% compare to the same period of the previous 2013 year.
As it became tradition, again Russian market opening was another
fall. Oil quotations continues their weakening, geopolitics situation is still very intense in all its meanings, and the same time investors still have been waiting for another round of discussion by Russian Federation regarding Ukraine gas deal. These factors do not let Russian market to make any efforts at least to try to rise. As well investors’ attention is now with the Central Bank whether it will keep national currency rate below 40 Rubles. The oppression against Ruble has been steadily growing lately, therefore Central Bank is changing borders of dual currency basket in efforts to slow down process of falling by currency interventions. To put it simple, regulator repeats all the actions that were made during winter of 2014, putting Rubles quotes further down and wasting external currency reserve.
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