MOSCOW, September 5 (Itar-Tass) - Russia’s ruble is depreciating rapidly, the Moskovsky Komsomolets newspaper writes. “Most market analysts agree that in December, the national currency to the US dollar would fall to 35 rubles or even more. The situation is even worse with the euro: on Thursday the official rate of the Russian Central Bank was 44.07 rubles, that is, there is a 10% euro growth in a few months,” the article says.
“At the same time, the Central Bank is trying to take the situation under control. If under the former chairman, Sergei Ignatyev, the Bank of Russia was brushing aside the support of the ruble, focusing exclusively on the fight against inflation, then the Central Bank’s new head Elvira Nabiullina in August alone sold $5.5 billion and EUR475.6 million in order to level the exchange rate. In general, during the summer of 2013, foreign exchange interventions of the Central Bank increased by 30%. However, the Central Bank has not notably succeeded in this endeavor,” the newspaper writes.
The Moskovsky Komsomolets daily links the weakening of the ruble to the situation in Syria and around it. “Syria has been in turmoil for two years already. Recently, there has been serious talk about missile and bomb strikes on targets of the Syrian government army by the United States and France. Investors are shy people,” the newspaper notes. “As soon as it smells of war, even far away from their offices, they immediately begin to withdraw money from the risky, in their view, assets. And which of them are the most risky? The currencies of developing countries.”
The newspaper gives an example of the Indian rupee, which has fallen (almost for the first time in its history) by more than 20%. A similar situation is with the Brazilian real.
“Capital flight is more and more affecting the weakening of the ruble.” According to the latest assessment of Nabiullina, this year’s net capital outflow would reach $70-75 billion. Whereas last year’s capital flight reached $56 billion. So, where withdraw to? Naturally, to reliable assets. The American dollar is their only embodiment,” the Moskovsky Komsomolets daily writes.
“It is paradoxical that the ruble is falling against the background of high oil prices,” the newspaper writes. “On Wednesday, Brent price stood at $113.27 per barrel (which is 0.44% less than the day before). However, all oil market experts are unanimous that with the escalation of the situation in Syria oil prices would only be growing. And very soon the oil prices would return first to the level of $117 per barrel and then would rise to a new historic high (the former was set on July 3, 2008) to $150 per barrel.”
“The thing is that being on the ‘oil needle,’ the Russian economy has lost the ability to positively respond to the upward trend of oil prices. It responds only negatively. The prices are falling - the ruble is falling after them. That’s what was happening this spring, when the oil price declined to $100 per barrel. However, the ruble does not respond to price rises,” believe experts interviewed by the Moskovsky Komsomolets newspaper.