01 June 2004 05:55
Dollar may slide to 28.8 rubles in June - Interfax CEA
Analysts say the dollar could dip to 28.8 rubles/$1 in June as
large volumes of export earnings continue to put pressure on the
MOSCOW. June 1 (Interfax) - Russia's financial market should remain relatively stable in June with the dollar
sliding and the rate of inflation down, enabling real yield on many instruments, the Interfax Center for Economic
Analysis predicts.
currency market. In addition, the banking system has seen a general drop in ruble liquidity over the past three
months. The lack of sufficient ruble supply could influence decisions on reducing earlier long positions on the
dollar.
The rate of dollar depreciation will depend on how ready the Central Bank of Russia is to support the dollar.
Recently, the Bank has shown its interest in maintaining a stable exchange rate and has bought dollars at just below 29
rubles/$1.
Dollar dynamics on the international Forex market could have some impact on the Russian market. If the dollar
continues to go down against the euro, the Central Bank may bring down its dollar buy quotes. These are the tactics
envisaged by the new policy to quote the ruble against a dollar/euro basket of currencies, which the Central Bank
announced it could be transferring to.
High volumes of export earnings and Central Bank dollar buying to contain ruble growth will lead to a rise in gold
and foreign currency reserves. The reserves could climb by $1.5 billion to $2 billion in May and reach $85.5 billion to
$86 billion.
The interbank loan market should be fairly stable in June with loan rates possibly edging down from the previous
month. Analysts expect improvement on the monetary-financing market because of increased dollar sales, which will make
ruble resources less expensive.
The market is due to receive about 36.8 billion rubles on June 24 in the second part of reverse repo operations with
OFZ 46008. However, analysts do not expect rates to fall to the minimum levels seen at the beginning of the year.
policy after the departure of Bella Zlatkis, who since the early
nineties has been one of the founders and curators of the GKO-OFZ
Ruble liquidity is expected to remain at a rather low level, partly thanks to the Central Bank, which considerably
lowered the rate of money supply growth this year. Considering also the slow down in tariff hikes for the population and
season factors, analysts predict inflation will fall to 0.3% in June. Thus, June inflation will be just 3.7% of annual
inflation, making all financial market instruments, with the exception of the dollar, profitable taking into account the
predicted trends.
Russian forex bonds may edge up in June, while yield spreads
between Russian bonds and U.S. T-bills will narrow slightly due to
expected stability on the U.S. market and Russia's generally good
An upward trend should dominate the GKO-OFZ market as ruble liquidity picks up and due to the positive impact of the
currency market and forex bonds market, where the mood was negative in April - early May in anticipation of a U.S.
interest rate hike.
The corporate bonds market is likely to see slightly brisker
trading and a weak upward trend. Analysts say that at the end of May
However, most players will probably prefer to keep demand down in anticipation of statements from the Finance
Ministry on market policy. Low liquidity at the end of the previous month could partly be attributed to uncertainty
regarding the Finance Ministry's further
market. Finance Ministry placements on the primary market may also hold back gains.
economic and financial situation.
many second tier bonds remained undervalued. The RUXCbonds-R index is expected to reach 114.7-115.2 points and the
RUXCbonds 161.3 to 161.9 points.
There should be steady growth on the stock market and most blue chips may gain 6%-7% on average by the close of the
month.
The appeal of current blue chip prices, after tumbling in April and May, stability on international stock markets,
which are ready for U.S. interest rate rise, and high oil prices, should encourage an upward trend. However, uncertainty
over the fate of Yukos, will hold back gains. [RU ASIA EUROPE EEU EMRG INSI ECI FRX TRD BNK M MMT CEN EUR GDM GOL GVD
EUB ENR STX] me
[Interfax] |
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