This genre photo shows a hand covering ruble and dollar bills.
Photo: Pavel Soloviev
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Foreign Ex Assets Squeezed Out of CBR
The pressure on Russia’s ruble has resumed after another depreciation staged by the CBR past Friday. The drop in the ruble demand coupled with its expected depreciation – the euro-dollar basket stood still at 31.3 ruble yesterday – forced the CBR to inject $2 billion to $2.5 billion from its stockpile Monday. The analysts are critical about the mere existence of the basket and, amid other scenarios, expect the ruble to depreciate at higher speed at this year-end and the CBR to change its policy for the exchange rate starting from early next year.
The players of Russia’s currency market had the chance yesterday to assess the CBR’s new policy after the rates’ increase and on expiration of the tax payment period. The market saw no surprise, people in Renaissance Capital say. The CBR proceeds with appreciating the ruble to bi-currency basket of $0.55+ˆ0.45 at 31.3 ruble and sells the reserves for this purpose. It probably spent between $2 billion and $2.5 billion to sustain the ruble, people in Renaissance Capital say.
Therefore, the scenario is similar to the one applied in November 11 through 24, when the CBR spent roughly $20 billion to rescue the ruble after hiking the rates and simultaneously depreciating the national currency by 0.3 ruble. Then, the CBR injected a few billions into the players that staked on the U.S. dollar; Russia’s banking authority had to defend the rate against the unexpected appreciation of euro to dollar in late November of 2008.
As to today’s efforts, it is yet unknown how the disposal of a portion of the CBR’s stockpile will affect the capital outflow. The latest estimate was provided in the first half of November and the forecasted amount was around $50 billion by this year-end. But given the changes in the country’s foreign exchange assets and the latest estimate of the payment balance (as of October of 2008), the actual amount could be roughly $75 billion.
www.kommersant.com
All the Article in Russian as of Dec. 02, 2008
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