Ruble Roars Back to 4-Month High
14 May 2009
By Ira Iosebashvili / The Moscow Times
After being the source of endless hand-wringing, the battered ruble is mounting a comeback, advancing to a four-month high of 31.93 against the U.S. dollar in trading Wednesday.
But whether its strength can be maintained, and whether a strong ruble is a good thing at all, appears to be anybody's guess.
The Central Bank set the exchange rate at 31.98 to the dollar for Thursday, a change of almost 1 percent from Wednesday, continuing a rally that has seen the ruble roar back 12 percent from a low of 36.34 in mid-February.
The ruble firmed up to 37.23 versus the Central Bank's dollar/euro currency basket in Wednesday trading, well beyond the 41 mark that the bank has promised not to let the ruble cross at all costs.
Now, with the currency trading almost 10 percent above the 41 level, Central Bank officials seem to have taken heart.
The bank said Wednesday that it would cut key interest rates by 50 basis points for the second time in less than a month. The bank's first deputy chairman, Alexei Ulyukayev, cited reduced inflation risk and a stronger ruble as the reasons for the cuts.
"[We cut] for the same reasons as the last time. There is a need to lower the Bank of Russia's interest rates, as that will reduce the cost of credit for the final borrower, the economic situation could improve," Ulyukayev told Reuters.
On Tuesday, Ulyukayev said he "could hardly imagine" the currency breaking the 41 level this year and that a move to 35 against the basket -- which would represent a 6.5 percent increase from current levels -- was "quite reasonable," Bloomberg reported.
Sergei Shvetsov, head of financial market operations for the Central Bank, was quick to offer his own optimistic assessments, saying Wednesday that Russians selling their foreign-currency holdings, which have reached more than $70 billion since the start of the crisis last fall, will help strengthen the ruble until the end of the year, RIA-Novosti reported.
Wednesday's ruble gains were fueled by a rise in the price of oil -- Russia's main export -- to a six-month high of a little more than $60 per barrel in New York and by the recent weakness in the dollar.
Analysts, however, were divided on whether ruble prices were sustainable and what a strong ruble could mean for the country's economy.
"Growth in the ruble was unavoidable in the face of higher oil prices," said Anton Tabakh, an analyst at Troika Dialog. "The situation, however, cannot be making the Central Bank happy."
A stronger ruble would mean much less taxes from exports and hurt Russian manufacturers selling their products abroad, Tabakh said.
"The weaker the ruble, the worse for the budget," he said, adding that the government would probably keep the ruble around these levels and try to avoid major price swings.
Natalia Orlova, chief economist at Alfa Bank, which predicts a 20 percent decline in the price of the ruble, said inflation remains a threat despite statistics showing that it has slowed in the last month.
"High inflation is preventing the decline of the real exchange rate," Orlova said. "Since inflation in unlikely to go down in the near future," the Central Bank must let the ruble depreciate, she said.
At least one analyst, however, said the benefits of a strong ruble far outweighed the disadvantages for the government.
"A strong currency attracts investment capital and encourages depositors to leave money in the banking system," said Chris Weafer, chief strategist at UralSib. "High oil prices and a strong ruble are actually an ideal combination for creating stability and confidence and attracting investment."
He said the government's top priority at least in the short term was creating an impression of stability.
By cutting interest rates and letting the ruble strengthen, the state is "sending a message that they are taking the first small steps toward creating growth," Weafer said.
"Of course, they can't do much more until there's greater certainty of a global recovery," he added
14 May 2009
By Ira Iosebashvili / The Moscow Times
After being the source of endless hand-wringing, the battered ruble is mounting a comeback, advancing to a four-month high of 31.93 against the U.S. dollar in trading Wednesday.
But whether its strength can be maintained, and whether a strong ruble is a good thing at all, appears to be anybody's guess.
The Central Bank set the exchange rate at 31.98 to the dollar for Thursday, a change of almost 1 percent from Wednesday, continuing a rally that has seen the ruble roar back 12 percent from a low of 36.34 in mid-February.
The ruble firmed up to 37.23 versus the Central Bank's dollar/euro currency basket in Wednesday trading, well beyond the 41 mark that the bank has promised not to let the ruble cross at all costs.
Now, with the currency trading almost 10 percent above the 41 level, Central Bank officials seem to have taken heart.
The bank said Wednesday that it would cut key interest rates by 50 basis points for the second time in less than a month. The bank's first deputy chairman, Alexei Ulyukayev, cited reduced inflation risk and a stronger ruble as the reasons for the cuts.
"[We cut] for the same reasons as the last time. There is a need to lower the Bank of Russia's interest rates, as that will reduce the cost of credit for the final borrower, the economic situation could improve," Ulyukayev told Reuters.
On Tuesday, Ulyukayev said he "could hardly imagine" the currency breaking the 41 level this year and that a move to 35 against the basket -- which would represent a 6.5 percent increase from current levels -- was "quite reasonable," Bloomberg reported.
Sergei Shvetsov, head of financial market operations for the Central Bank, was quick to offer his own optimistic assessments, saying Wednesday that Russians selling their foreign-currency holdings, which have reached more than $70 billion since the start of the crisis last fall, will help strengthen the ruble until the end of the year, RIA-Novosti reported.
Wednesday's ruble gains were fueled by a rise in the price of oil -- Russia's main export -- to a six-month high of a little more than $60 per barrel in New York and by the recent weakness in the dollar.
Analysts, however, were divided on whether ruble prices were sustainable and what a strong ruble could mean for the country's economy.
"Growth in the ruble was unavoidable in the face of higher oil prices," said Anton Tabakh, an analyst at Troika Dialog. "The situation, however, cannot be making the Central Bank happy."
A stronger ruble would mean much less taxes from exports and hurt Russian manufacturers selling their products abroad, Tabakh said.
"The weaker the ruble, the worse for the budget," he said, adding that the government would probably keep the ruble around these levels and try to avoid major price swings.
Natalia Orlova, chief economist at Alfa Bank, which predicts a 20 percent decline in the price of the ruble, said inflation remains a threat despite statistics showing that it has slowed in the last month.
"High inflation is preventing the decline of the real exchange rate," Orlova said. "Since inflation in unlikely to go down in the near future," the Central Bank must let the ruble depreciate, she said.
At least one analyst, however, said the benefits of a strong ruble far outweighed the disadvantages for the government.
"A strong currency attracts investment capital and encourages depositors to leave money in the banking system," said Chris Weafer, chief strategist at UralSib. "High oil prices and a strong ruble are actually an ideal combination for creating stability and confidence and attracting investment."
He said the government's top priority at least in the short term was creating an impression of stability.
By cutting interest rates and letting the ruble strengthen, the state is "sending a message that they are taking the first small steps toward creating growth," Weafer said.
"Of course, they can't do much more until there's greater certainty of a global recovery," he added
22/5 2009 00:47 le 0
11827 men uhyggeligt så hårdt deres økonomi er ramt selvom olieprisen er over 60 og meget højere end for bare 5-6 år siden
jeg har hørt om at de også vil stimulere bilsalg og forbrug, men de har spildt en masse rubler på at stabilisere valutaen dengang den faldt, men nu den stiger og valutaindtægterne stiger bør de altså kunne få sat gang i et stimuleringsprogram som i kina, indien og brazilien
de har jo masser af valutareserver og overskud på handelsbalancen
ellers er de da bare for dumme
og, især bør de sæte gang i et statsstyret boligbyggeri projekt
Thursday, 21st May 2009
UPDATE 1-Russia Apr industrial falls record 16.9 pct-report
18-MAY-2009 10:59
MOSCOW, May 18 (Reuters) - Russia's industrial output fell by a record 16.9 percent in year-on-year terms in April, Ekho Moskvy radio station said on Monday, quoting statistical data that had been submitted to the government.
Analysts had expected a contraction of 13.4 percent
The report did not provide a detailed breakdown of the data. Deputy Economy Minister Andrei Klepach confirmed the report to Interfax news agency. Official data is due later on Monday.
'Today's data signals a very weak labour market data,' said Danske Bank senior analyst Lars Rasmussen.
'It also shows that the Russian economy is not going to stabilise in the second quarter unlike the economies of other BRIC countries,' he said referring to Russian peers Brazil, India and China.
Industrial production shrank by 13.7 percent year-on-year in March. The previous contraction record in the series' seven-year history was set in January when output fell by 16 percent.
'The search for the bottom is still on. In May we may see an even lower number,' said Trust Bank chief economist Yevgeny Nadorshin. 'Problems in heavy industries, cuts in investment plans remain.'
On Friday, the Federal Statistics Service said the Russian economy shrank 9.5 percent in the first quarter. The government expects the economy to contract by six percent in 2009 after a decade of oil-fuelled economic boom.
Goldman Sachs last week revised its forecast for the GDP contraction to 7.5 percent while Russian Alfa Bank expects a 5.7 percent fall.
The International Monetary Fund sees the Russian economy contracting by 6 percent, in line with the government's view.
(Reporting by Gleb Bryanski, editing by Mike Peacock) Keywords: RUSSIA INDUSTRY/OUTPUT
(gleb.bryanski@reuters.com ; +7 495 775 1242; Reuters Messaging: gleb.bryanski.reuters.com@reuters.net )
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
jeg har hørt om at de også vil stimulere bilsalg og forbrug, men de har spildt en masse rubler på at stabilisere valutaen dengang den faldt, men nu den stiger og valutaindtægterne stiger bør de altså kunne få sat gang i et stimuleringsprogram som i kina, indien og brazilien
de har jo masser af valutareserver og overskud på handelsbalancen
ellers er de da bare for dumme
og, især bør de sæte gang i et statsstyret boligbyggeri projekt
Thursday, 21st May 2009
UPDATE 1-Russia Apr industrial falls record 16.9 pct-report
18-MAY-2009 10:59
MOSCOW, May 18 (Reuters) - Russia's industrial output fell by a record 16.9 percent in year-on-year terms in April, Ekho Moskvy radio station said on Monday, quoting statistical data that had been submitted to the government.
Analysts had expected a contraction of 13.4 percent
The report did not provide a detailed breakdown of the data. Deputy Economy Minister Andrei Klepach confirmed the report to Interfax news agency. Official data is due later on Monday.
'Today's data signals a very weak labour market data,' said Danske Bank senior analyst Lars Rasmussen.
'It also shows that the Russian economy is not going to stabilise in the second quarter unlike the economies of other BRIC countries,' he said referring to Russian peers Brazil, India and China.
Industrial production shrank by 13.7 percent year-on-year in March. The previous contraction record in the series' seven-year history was set in January when output fell by 16 percent.
'The search for the bottom is still on. In May we may see an even lower number,' said Trust Bank chief economist Yevgeny Nadorshin. 'Problems in heavy industries, cuts in investment plans remain.'
On Friday, the Federal Statistics Service said the Russian economy shrank 9.5 percent in the first quarter. The government expects the economy to contract by six percent in 2009 after a decade of oil-fuelled economic boom.
Goldman Sachs last week revised its forecast for the GDP contraction to 7.5 percent while Russian Alfa Bank expects a 5.7 percent fall.
The International Monetary Fund sees the Russian economy contracting by 6 percent, in line with the government's view.
(Reporting by Gleb Bryanski, editing by Mike Peacock) Keywords: RUSSIA INDUSTRY/OUTPUT
(gleb.bryanski@reuters.com ; +7 495 775 1242; Reuters Messaging: gleb.bryanski.reuters.com@reuters.net )
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
22/5 2009 00:49 le 011828 Medvedev Scolds Cabinet on Economy
18 May 2009
Combined Reports
President Dmitry Medvedev scolded senior officials on Friday for failing to reform the economy and said the Kremlin would take charge of efforts to boost it.
Medvedev has complained several times about how officials in Prime Minister Vladimir Putin's government have handled the economic crisis, though he has stopped short of direct criticism of Putin, who has overall responsibility for the economy.
"This is a topic which is supposed to be one of our priorities ... but which, unfortunately, is practically not moving at all," Medvedev said at a meeting on the modernization of the economy.
"Everything that has been done until recently, I repeat again, has unfortunately not brought the required results," he said at the presidential residence in Gorki outside Moscow. "I consider it correct for this question to be dealt with by the president."
Medvedev told Economy Minister Elvira Nabiullina and First Deputy Prime Minister Igor Shuvalov that efforts to foster innovation and help companies spend more on research and development had failed.
"Practically no significant changes in the technological levels of our economy are taking place. This is especially obvious in the conditions of a global financial-economic crisis," Medvedev said, describing Russian companies' investment in innovation -- 6 percent of their total spending -- as "shockingly low."
"Technological parks ... Russia's venture capital company ... special economic zones -- all this basically exists only on paper," he said, adding that labor productivity in Russia was just a quarter of levels in the United States.
Other officials at the meeting included Vladislav Surkov, the Kremlin's first deputy chief of staff, German Gref, the head of Sberbank, and Vladimir Dmitriyev, the head of Vneshekonombank
18 May 2009
Combined Reports
President Dmitry Medvedev scolded senior officials on Friday for failing to reform the economy and said the Kremlin would take charge of efforts to boost it.
Medvedev has complained several times about how officials in Prime Minister Vladimir Putin's government have handled the economic crisis, though he has stopped short of direct criticism of Putin, who has overall responsibility for the economy.
"This is a topic which is supposed to be one of our priorities ... but which, unfortunately, is practically not moving at all," Medvedev said at a meeting on the modernization of the economy.
"Everything that has been done until recently, I repeat again, has unfortunately not brought the required results," he said at the presidential residence in Gorki outside Moscow. "I consider it correct for this question to be dealt with by the president."
Medvedev told Economy Minister Elvira Nabiullina and First Deputy Prime Minister Igor Shuvalov that efforts to foster innovation and help companies spend more on research and development had failed.
"Practically no significant changes in the technological levels of our economy are taking place. This is especially obvious in the conditions of a global financial-economic crisis," Medvedev said, describing Russian companies' investment in innovation -- 6 percent of their total spending -- as "shockingly low."
"Technological parks ... Russia's venture capital company ... special economic zones -- all this basically exists only on paper," he said, adding that labor productivity in Russia was just a quarter of levels in the United States.
Other officials at the meeting included Vladislav Surkov, the Kremlin's first deputy chief of staff, German Gref, the head of Sberbank, and Vladimir Dmitriyev, the head of Vneshekonombank
Det har faktisk rigtig stor betydning for carlsberg. Netop rublens fald samt gældsbyrden har gjort mig skeptisk overfor Carlsberg.
