Dollar Market Roiling
The Central Bank of Russia yesterday published its first data on the movement of cash money in September, the first month of the financial crisis. The data show that the pace at which the public has been losing interest in cash savings since 2006 is accelerating. Demand for dollars and euros in cash in Russia in September reached the level of 2002-2004, even when adjusted for seasonality, and the trade balance in currency reached a high for the last year.
A new record for the year of more than $6 billion was set for sales of currency in September (surpassing the high point seen in March). Banks had to import $2.8 billion into the country to keep up with demand. Of that sum, $1.2 billion was in dollars, and $1.5 billion was in euros. The trade balance in currency reached almost $3.5 billion in September, and there is no doubt that that sum was surpassed in October, and will be greater still in November, if the ruble weakens. It may even hit the levels of five years ago. The record for this century so far was set in 2004, at over $3.3 billion. The all-time record for currency sales, $5.8 billion in December 2005, will most likely be broken in the coming months as well, unless the ruble strengthens considerably.
None of this is comparable with the currency panic in 1998, or with dollarization at the beginning of the 1990s, or with the demand for dollars in Ukraine in August through September 2008. Before the Central Bank seriously considers measures to limit the market for cash dollars, such as the National Bank of Ukraine undertook, demand for the currency will have to rise tremendously still.
www.kommersant.com
All the Article in Russian as of Nov. 13, 2008
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