The Bank of Russia can reduce the key rate How to react to the ruble

Especially for “the Russian newspaper” Sergey Drozdov, an analyst CC “FINAM”, described the situation with the oil market, and also gave a forecast on the further decisions of the Central Bank and the movement of the exchange rate.

– After the dramatic events that unfolded on Monday in the oil market, in the prices of futures contracts for Brent and WTI has moved to a gradual recovery, – the expert reminded. It supported the closure of the aggressive bets on lower prices of a barrel of large funds. As well as news about the forced reduction of production of oil in the Western hemisphere.

According to the Wall Street Journal, amid rapid fall in oil prices, a number of companies working in the Gulf of Mexico, curtail production of and close well. In addition, Mexico recently refused to join the new agreement, OPEC+ announced the closure of 19 fields. And Kuwait earlier indicated in a recent deal the OPEC+ timing started to decline in exports of black gold.

However, due to the still low global demand situation on the energy market remains difficult, in the medium term will contribute to strong fluctuations in oil prices. However, despite adverse conditions, the Russian currency showed strength against the dollar and the Euro.

This stability is due to two factors. The first is ongoing in the framework of the budget rules foreign exchange intervention the Bank of Russia. Only in the last few days, the regulator sold currencies approximately 50,8 billion rubles. And the second factor is the increased interest from foreign and domestic investors in the debt segment of the Russian market, as evidenced by the record volume of placement of OFZ Treasury.

the Reason for such an active interest in ruble-denominated public debt have become the expectations of today’s meeting of the Russian Central Bank, which, in the opinion of the bidders, the office of Elvira Nabiulinoj may continue easing monetary policy. The question is only, to what levels can be trimmed a key interest rate.

Now, in conditions of relative stabilization in global financial markets, at its meeting on 24 April, the Bank of Russia could lower the rate by 0.5 percentage points (to 5.5 percent). Such a step could be justified, the negative consequences and future risks for the Russian economy, which arose in connection with forced quarantine measures announced because of the threat of the spread of a new type of coronavirus.

At this stage, the Central Bank estimates the damage from fallen from the usual schedule APR losses of 1-2 percent of GDP.

In this regard, coupled with the anti-crisis package adopted earlier by the government of the Russian Federation, cheaper financial resources moglee would be an additional incentive measure for the Russian economy in the period of its isolation.

As a rule, the easing of monetary conditions leads to a weakening of the national currency, but in the case of the ruble, a negative market reaction to rate cuts will be short-term in nature and the end of the current week the pair dollar/ruble can hold in the range 73,50-76.