Because of the business defaults, the dollar will soar to new heights

the Ruble will cover the defaults of business after COVID-19 and oil prices. And the dollar will make new highs.

this Is the forecast of Ivan Kopeikin, head of analytical content “BCS”. Especially for the “Russian newspaper”, he talked about exchange rates this week and more distant prospects:

Photo: iStock the Central Bank recommended to restructure the loans of citizens with coronavirus

– Oil and the spread of the coronavirus and this week will be key for exchange rate. Meanwhile, the situation in the medium term may well be exacerbated by the defaults of the various companies.

And if the limited activity of the companies will be long, the defaults of these are not in the same specific sector, and probably across the industry spectrum.

But in the short term, the actions of Central Banks, namely the infusion of the huge mass of cash liquidity, should help to somewhat stabilize the markets. In recent weeks, it was possible to observe a decline in interest rates or expanding monetary stimulus from the U.S. Federal reserve, European Central Bank, the Bank of England, Bank of Japan, people’s Bank of China and others.

Additional stimulation with the coordinated participation of the world’s Central Bank, earlier almost always become an occasion to active purchases in the financial markets. Of course, that was before, shouldn’t happen in the future, but history often repeats itself than Vice versa.

At the same time the Bank of Russia will also be in the near future to keep the ruble from strong fluctuations. In my opinion, was very promptly announced an additional sale of currency, as well as auctions to provide extra liquidity.

Photo: Eugene Novozenina/RIA Novosti Belousov named responsible for the sharp drop in oil prices

Now, as the price of oil. Contribute to their stabilization may quite a high probability that OPEC+ will again sit down at the negotiating table. And the demand for “black gold” locally can increase purchases of oil from the U.S. strategic reserve and the increase in connection with the low prices from China.

So in the short term I would not have panicked. The probability of the dollar to hold above 82, while the Euro is above 90 in the coming days is not very high.

However, another wave of ruble depreciation and other risky assets on the background of the default of a number of companies I’m still waiting. But, in my opinion, it will happen no earlier than a few months. In this case, we may see the dollar above the level of 90 rubles.