On the first business day of the year, oil has risen to 58 dollars per barrel. The ruble and the Moscow stock exchange started the year with a record of strengthening. On the eve of the American Agency Bloomberg has made Russia among the most attractive countries for investment in 2017. As the newspaper VIEW, this should contribute not only economic but also geopolitical factors.
On Tuesday at the opening of trading on the Moscow stock exchange the dollar exchange rate calculations “tomorrow” fell below 61 of the ruble, the Euro fell 57 cents, falling below 64 rubles. The dollar / ruble exchange rate decreased compared to the past performance of trading 30 December 30 cents to 60.97 ruble. Note that over the past year the ruble has appreciated against the dollar by 20.1% to Euro 24.7%.
“For our industry, which is already used to the exchange rate of 65 rubles to the dollar, a further strengthening will lead to the loss of competitiveness”
The dollar ended the last trading day on the exchange at around 61,27 ruble, Euro – ruble 64,52, whereas at the end of 2015 courses was of 73.59 rubles and ruble 80.43 respectively. A record high, the dollar reached on January 21 of last year, rising almost to 86 rubles, the Euro then price rose to 93.7 per ruble. In those days, the depreciation of the ruble compared to the closing last year was about 14% against the dollar and the Euro.
Minimum levels for 2016 was achieved the main reserve currency in December 60,1075 rubles per dollar and 62,46 of ruble per Euro.
The MICEX index began in 2017 with a growth on Tuesday morning, he said to 12.00 GMT rose 1.22%, setting a new historical maximum in 2260,7 points. The RTS index increased by 1.2% to 1165,5 points.
Moscow exchange will last from 3 to 6 January. On Christmas day the auction closes (7-8 January). In addition, on February 23 and February 25-26, will also be output in all markets of the Moscow exchange.
On the eve of the American Agency of business information Bloomberg called the ruble the main stake for the investors, who have in currencies of the States, which has a low interest rate. Therefore, in 2017 Russia will be one of the most attractive countries for investment.
According to the Agency, the rise in oil prices helps Russia to make its securities market as a candidate for investment. Now Brent crude is trading close to 57.1 percent. Tuesday morning the price per barrel amounted to $ 58. The last time Brent traded at this level on 15 July 2015. Last year hydrocarbons rose by more than half, it was the largest growth rate since 2009.
And, according to Swiss Bank UBS, in 2017, the potential income from trade of the Russian currency may reach 26%, which would be the highest rate among emerging markets, Europe, Middle East and Africa.
The strengthening of the ruble, “we are now to anything”
However, the Finance Ministry believe that too much strengthening of national currency should not. The Minister of Finance Anton Siluanov in interview to TV channel “Russia 24” stated the other day that in the new year, the Ministry does not expect serious fluctuations of the ruble, “since in the current projections will not be drastic changes in the rate of the Federal reserve”. “For our industry, which is already used to the exchange rate of 65 rubles to the dollar, a further strengthening will lead to loss of competitiveness. I think that additional exchange rate fluctuations, even in the direction of strengthening of the ruble, we are now to anything”, – said Siluanov.
As the newspaper VIEW, the new year promises to be more favorable ruble and its exchange rate may fluctuate in the corridor of 60-65 rubles per dollar and 63 to 68 rubles per Euro. The position of the Euro may weaken upcoming political events in the European Union.
In may in France must pass the presidential election, and in autumn in Germany – parliamentary. In case of victory of eurosceptics in France, the Euro definitely will fall. But if in Germany the incumbent Chancellor Angela Merkel will not be re-elected, the Euro could collapse, and the dollar – to reach parity with the Euro.
The ruble also helps the decision of the oil cartel OPEC to reduce oil production by 1.2 million barrels per day and the decisions of the independent producers to cut production by another 600 million barrels a day. From them 300 thousand barrels will be in Russia, 100 thousand – in Mexico, the remaining volumes will be distributed between other countries. Obligations on reduction of oil production from countries outside OPEC took on 11 countries: Russia, Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Equatorial Guinea, Sudan and South Sudan.
Russia plans to cut daily production by 300 million barrels during the first four months of the new year. According to analysts, the main decrease will be in the spring, during a routine workover. In sum, independent producers world oil production in the first half of the year should be reduced by almost 1.8 million barrels per day. This unprecedented reduction.
This will help to keep the cost of a barrel above $ 50, or even bring up to $ 60. Support the ruble will have positive macroeconomic statistics in Russia, but in that case, if the dynamics of GDP does not deteriorate and inflation will continue to remain low.
However, to weaken the ruble can the promise of the Central Bank to reduce the key rate. But the reduction in the rate to 8.5–9% to support the real economy and the ruble.