The trend for the strengthening of the ruble, which has continued since November last year, dropping the dollar to last summer’s levels, is close to exhaustion, analysts at the Dutch bank ING say.
The current levels – in the range of 72-73 rubles per dollar – look “attractive for the formation of positions in foreign currency”, writes Dmitry Dolgin, ING’s chief economist for Russia and the CIS, in his review.
High oil prices continue to play in favor of the ruble and the prospect of an increase in its exports as OPEC + quotas are softened, closed borders in the direction of Turkey and Egypt (reducing currency outflow), as well as the “hawkish” position of the Central Bank, which launched a cycle of raising the key rate, lists is he.
In addition, foreign investors are gradually returning the currency to the market in the Russian government debt. After five months of sales in May, non-residents increased their investments in OFZs by $ 0.7 billion.
Against the ruble, however, there is a sharply growing import, which washes the currency out of the economy: by the end of April, purchases of goods from far abroad soared by 49%.
And besides, the dividend season starts, which will worsen the balance of currency flows. In May-August, Russian companies will pay $ 7 billion to foreign holders of their shares, Dolgin estimates.
These funds will be converted into foreign currency and withdrawn from Russia, which will create additional demand on the exchange, which will push the rates higher.
Finally, Dolgin continues, the export of capital by the private sector remains high. In January-May, according to the Central Bank, $ 24.6 billion “flowed away” from the country – two-thirds of the net inflow of foreign exchange that the economy received on the current account of the balance of payments ($ 35.8 billion).
“The dividend season, galloping imports and persistently high private capital outflows could be an obstacle to the strengthening of the ruble this summer. We continue to consider the levels of 72-73 rubles per dollar as attractive for the formation of foreign exchange positions, ”the review says.
According to the Central Bank, foreign banks bet on the strengthening of the ruble in November last year, when the dollar rate reached a local maximum above 80 rubles.
Having taken a long position in the ruble on the swap market, non-residents and subsidiaries of foreign credit institutions brought it to $ 15 billion by mid-March, after which they began to cut it and left about $ 8 billion by the beginning of May.