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Rouble weakens because of capital outflows

September 21, 2011, 13:44 UTC+3

Economists say Russia currently has no internal prerequisites for the growth of foreign exchange rates

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The dollar and euro rate against the rouble has sharply risen in recent days. Economists say Russia currently has no internal prerequisites for the growth of foreign exchange rates. They explain this primarily by the capital outflow from Russia.

At the opening of trading on the Russian currency market on Tuesday, the European and American currencies demonstrated a significant growth, Novye Izvestiya writes. The euro traded close to the mark of 43 roubles, thus approaching to the maximum of November 2010, and the dollar has grown by 54 cents - up to 31.52 roubles. The currency basket of the Central Bank also went up by 28 cents - up to 36.65 roubles, breaking a record of December 2009. And, apparently, it is not yet the limit.

The question arises: as the European prospects are not very bright, and in the United States the moods on trading floors are supported only by weak financial expectations of a miracle, then why the euro and the dollar in our country are growing and firming every day? - writes the newspaper. In the view of Professor of the stock market and investments department of the Higher School of Economics Alexander Abramov, there are several reasons for the sharp rise of the dollar-euro pair against the rouble. “First of all, capital is exported from the country, which undermines the positions of our currency. Second, there are the Central Bank measures to reduce the foreign currency lending rates, because of which the rouble falls again. And third, the Russian and foreign major financial institutions expect the global economy slowdown. This can strongly hit us because of the dependence on energy resource exports,” the professor explains.

Economists have admitted that such a fall of the national currency was a surprise to them, writes the Trud daily. “After all, oil prices only slightly varied over the past few weeks, so this definitely cannot be blamed for influencing the rouble exchange rate, as it happened earlier when oil prices fell in the markets,” analyst of TKB Capital Sergei Karykhalin told the publication.

Economists noted that there are no internal prerequisites in Russia today for the growth of foreign exchange rates. “The budget is stable, everything is all right with the national debt, so that there is no reason for panic,” said Vladimir Tikhomirov of the Otkritie investment bank.

According to him, now there are two main external causes of the devaluation of the rouble. “American banks have stopped selling dollars to European banks because of uncertainty with the euro, owing to which the Russian “daughters” of European financial institutions have begun to actively buy dollars from us, and as a result, it went up,” the expert explains. “And the second reason – the general negative background due to the debt problems of the eurozone.”

Alexei Devyatov of Uralsib noted that in September the capital outflow from Russia sharply increased, which always causes a rise in the currency rates. “I think that by the end of September about $10 billion will outflow from the country, given that the outflow for the first six months of the year reached 30 billion dollars,” the economist noted.

The rouble has weakened due to the deteriorating situation in the United States and Europe, investors are fleeing from riskier assets, which is reflected in Russia in the form of capital outflow, in addition, in October it is time to repay foreign loans for Russian companies, Vedomosti quotes Ashot Minasyan of the BCS brokerage office.

Retail speculators have decided to take advantage of the situation, the publication notes. Compared to last year, the number of people interested in trading has increased many times, more and more people are coming to Forex from the stock market, sales manager of the Alpari company Dmitry Suvorov says.

It seems that bankers do not hope much for the rate stabilisation in the short run.

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