Russia's market of foreign exchange rolled back to many years ago yesterday. The abrupt depreciation of Russia's ruble – the U.S. dollar surged 50 kopecks in the last two days – triggered the slump on stock markets.
Photo: Ivan Grankin
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Market Doesn't Cost More Than a Ruble
Russia's market of foreign exchange rolled back to many years ago yesterday. People were queuing in front of exchange offices and the rate for the cash currency was fluctuating. The abrupt depreciation of Russia's ruble – the U.S. dollar surged 50 kopecks in the last two days – triggered the slump on stock and bond markets. The bonds of Russia's biggest corporations sank over 1.5 percent in two days and the RTS benchmark fell over 8 percent. Some analysts forecast the prices for real estate to go down as well.
Russia's ruble lost yesterday another 13 kopecks to bi-currency basket ($0.55/€0.45), shedding to 30.40 ruble for it. It was the record low from February of 2007, when the new structure of that basket was introduced. The rate to the U.S. dollar lowered by 6 kopecks (in addition to 43 kopecks a day ago) to 25.33 ruble. According to Troika Dialog analysts, the decline could be mostly attributed to the dollar's appreciation vs euro, and the capital outflow accounted for the remainder. The third reason was of psychological nature. Once the milestone of 25 ruble/$ was passed, the investors rushed to buy the U.S. currency at large.
The Central Bank of Russia (CBR) showed up on the market of foreign exchange yesterday morning, selling the dollars in an effort to back up the national currency. The traders differ in estimating the amount of dollars sold by the CBR, giving from $2.5 billion to $4 billion. The dollar cost 25.30 ruble when the MICEX closed its foreign exchange trading. But those selling efforts of the CBR narrowed the balance of correspondent accounts along with the banking sector liquidity.
The situation on the stock market was equally tense. The news about the agreement of TNK-BP holders fueled the market for a while, but the growth didn't survive for long. The final blow was the statement of the U.S. Vice President Richard Cheney that Washington would welcome Georgia in the NATO. As a result, RTS dropped 3.94 percent, which was the minimum from April of 2006, and MICEX went down 3.26 percent (minimum from June of 2006). The banking sector led the decline: VTB lost 6.57 percent and Sberbank sank 5.13 percent.
The bonds followed the trend. The quotes of corporate and bank eurobonds shed over 1 percent in the last two days; long-term issues of such giants as Severstal, TMK, Transneft, ALROSA, VimpelCom, MTS, Alfa Bank, Russian Standard Bank were the key losers. The ruble bonds of the biggest corporations and federal ventures, including Gazprom, LUKOIL, FSK, HydroOGK, RZD, sank 1.5 percent on average. And the analysts foresee no recovery in the nearest future.
www.kommersant.com
All the Article in Russian as of Sep. 05, 2008
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