Ruble may slightly weaken in May, in response to the lowering of the key interest rate by the Central Bank on April 29 when the key rate was reduced from 17% to 14%, according to AMarkets Analytics Director Artem Deev.
The financial regulator lowered the key rate in the wake of the current inflation dynamic and the stability of the national currency. Another reason is softening the monetary policy for the purpose of stimulating economic processes in the country, the expert told Invest Foresight.
Lowering the key rate in this case is a key factor for the Russian ruble as regulatory measures are currently affecting it more than the market. The Central Bank has already lifted the restrictions on foreign currency imposed earlier to prevent the ruble’s collapse. The ban on selling foreign currency in cash to individuals and the commission on stock market purchases of foreign currency (12%) have been lifted. Exporters are now allowed to sell 80% of earned foreign currency within 60 days rather than 3 days. The ruble remains stable, due to lower amount of imports that the country can buy under the sanctions, Artem Deev stresses.
“However, the ruble’s weakening in May will be slow and slight as dollar will not rise above 76–77 rubles and euro above 80 rubles,” the analyst predicts. “This exchange rate will be more favorable for export operations that companies’ revenues – and the budget revenue – depend on.”