End of the week for the ruble: an attempt to hold positions

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

The first week of February was moderately difficult for the “Russian”, and its end was ambiguous. Oil prices barely got out of their peak, and in the situation with the Chinese coronavirus, it still does not smell of stability and correct forecasts.

You can learn more about trends and news on the foreign exchange market, about forecasts and opinions of analysts in the InstaForex blog.

Oil floating at $ 55

The main consumer of liquid hydrocarbons, China, has cut consumption by 20%, according to January reports. For the oil market, the initiative provoked by the well-known force majeure resulted in a drop in demand by 3 million barrels. In February, the situation may worsen even more, and the fall will amount to 3.2 million.

Obviously, fears of the worst and the current picture in the market sent "black gold" below $ 60 per barrel.

The convened OPEC + committee, which was supposed to discuss the extension of production restrictions until the end of the year or a reduction in production by 500-1000 thousand barrels per day, could not agree. Including because of Russia's disagreement on a number of issues.

Coronavirus is not defeated

The World Health Organization hastened to reassure the optimists - it is not a fact that we have survived the peak of the virus, and the situation may worsen in the foreseeable future. The number of people infected and dying from the disease is growing.

The instability and complexity of forecasting the situation, the uncertainty of what harm the virus will ultimately cause to the economy and the stock market, provokes investors to look for protective assets. The dollar wins, and the ruble, being a highly profitable currency, loses potential buyers.

Despite the fact that in recent days the virus took the position of a secondary factor, and market players again switched to macroeconomic reports, any negative news could sow panic again.

Internal factors

The Ministry of Finance has revised the foreign currency purchase policy within the framework of the budget rule, having reduced the volume of the operation by almost half. Now the Ministry is carrying out purchases worth about 11 billion rubles.

On Friday, a meeting of the Central Bank of the Russian Federation will take place, at which a possible rate cut by 25 points will be discussed. If earlier this step was expected by most analysts, now, given the situation with the virus and the fall in oil prices, they did not exclude the possibility that the regulator could change policy, leaving the rate at the same level or postponing its reduction for the March meeting. The probability of such an outcome, according to a number of forecasters, was about 50%.