MOSCOW, October 4. /TASS/. The Russian ruble is severely oversold due to a number of variables, including an imbalance in the supply and demand for foreign currency, the conclusion of the tax season, and Chinese holidays, according to analysts interviewed by TASS. At the same time, there are no objective macroeconomic factors holding the dollar above the 100-ruble mark, and they predict the ruble may return to 95-96 rubles by the end of October.
Fundamentally, the ruble remains under pressure from a foreign currency demand-supply imbalance, which arose against the backdrop of a limited inflow of foreign currency earnings as a result of sanctions restrictions on Russian exports, as well as Russia's voluntary reduction in oil production, investment strategist at BCS World of Investments Alexander Bakhtin said.
At the same time, the end of the tax period, the growth of the global dollar (the growth of the DXY index), and the decline in commodity price were local negative factors for the ruble, according to the expert. Due to restricted liquidity, the ruble falls further due to the Chinese holidays from October 2 to October 6. "Given the share of the yuan in the trading volume of the Moscow Exchange, it is quite possible that the decrease in activity in the yuan/ruble pair led to pressure on other instruments," analyst at Alfa Capital Alexander Dzhioev said. While yuan trade is suspended, demand for the dollar and euro could rise.
According to specialists, in such a situation, in the short term the dollar may reach 101.7 rubles, the euro may exceed 105 rubles, and the yuan may approach 14 rubles.
Temporary weakness
According to analysts, the current weakening of the ruble is only temporary. In particular, because of the increasing attention of the Bank of Russia, which may have leverage over the issue. Bakhtin believes that these are one-time interventions, including a key rate, mandated requirements for the selling of foreign currency to exporters, as well as capital withdrawal limitations.
At the same time, experts do not rule out the possibility of a future "intervention" by the Bank of Russia in the currency situation, as the medium-term balance of variables may shift in favor of the ruble. First, the impact of two important rate hikes should gather traction in the coming months. Second, when the broader market environment improves, the global dollar may retreat from its annual highs. This, in turn, is always beneficial to commodities prices and developing-country currencies. Furthermore, changes in oil prices, the dynamics of macroeconomic and fiscal parameters, the situation on the ruble debt market, and geopolitics will all have an impact on the ruble exchange rate, investment strategist at BCS World of Investments said.
Company forecasts
The ruble is currently extremely oversold, stronger against the dollar and yuan than against the euro, but "there are no objective macroeconomic factors for such a collapse," according to Freedom Finance Global. BCS World of Investments believes that by the end of October, the ruble will not only stabilize, but may also reach 95-96 rubles, and that by the end of the year could be closer to 90 rubles. The euro may decline below 100 rubles by the end of the year, while the yuan may fall below 13 rubles.
Alfa Capital and Cifra Broker believe that the range of 85-95 rubles is appropriate for the dollar. They also forecast the euro at 97-105 rubles and the yuan at 13-14 rubles.
Finam's most pessimistic projection for the ruble at the end of the year is in the range of 92-102 rubles per dollar, 101.5-106.5 rubles for the euro, and 13.0-13.8 rubles for the yuan.