Active reduction of the key rate of the Central Bank of the Russian Federation in recent time reduces the flow of funds in ruble-denominated financial instruments in the framework of the carry trade, according to respondents RIA Novosti experts. Among other things, this puts pressure on the ruble, the experts believe.
Carry trade is the investment strategy of gaining profit on the Forex market due to different interest rate. In particular, it could be sale of currency (dollars, Euro, on which the fed and the ECB keeps rates near zero) and the purchase of these funds for ruble-denominated financial instruments that are profitable. Such actions of investors lead to higher supply of foreign currency on the Russian market and, accordingly, to the strengthening of the ruble.
Expected on 24 July, the reduction of the key rate of the Central Bank will have little impact on the exchange rate, however, the comments of the regulator on the prospects for monetary policy will be the main reference point for exchange rate dynamics, according to respondents RIA Novosti experts.
At the next meeting of the Board of Directors of the Bank of Russia July 24, we expect another reduction of the key rate from the current 4.5% per annum, to which the indicator came last June - a meeting of the Board of Directors. Then the rate was reduced from 1 percentage point for the first time in five years to a historic low.
Russia for several years already more or less adapted to the sanctions, therefore, the risks of a second wave of coronavirus and new quarantine measures are more dangerous to the ruble than the possible new Western sanctions against Russia, believe polled by RIA Novosti experts.
Currently the exchange rate is affected by several factors: oil prices, output non-residents of the OFZ, coronavirus and possible sanctions because of the "Nord stream -2", says head of personal brokerage services "BCS" Sergei Kuchin.
Dollar 235th birthday which falls on June 6, over time became the main reserve currency in the world. Could the third U.S. President Thomas Jefferson, who proposed to establish the dollar as the official monetary unit of the United States, to dream that the American currency will dominate the international financial system?
RIA Novosti interviewed experts, in analyzing the strength of the us currency and can digital currency be alternative.