The attack on the ruble: the Americans are upping the ante


Удар по рублю: американцы повышают ставку

The fed raised the rate by 25 points. This decision was taken amid record low unemployment and overall improvement in the economic situation. Experts predict a further rate hike by the fed. Given that the Bank of Russia lowers the rate, that will pose a threat for the ruble, as foreign investors will not be so interested in investing in ruble assets.

The American stock market rose after the fed’s decision to increase base rate. It became known yesterday that the Federal reserve system (FRS) raised the interest rate to 1.25-1.5% 1-1 25% per annum.

After that, the us market closed in positive territory. So, the Dow Jones industrial rose by 0.03% to 24585,43 points, the index of wide market S&P 500 fell by 0.05% to 2662,85 points, the index of high-tech companies NASDAQ has increased by 0.2% to 6875,80 points.

The decision to raise rates the fed could take against the background of improved economic situation.

“Information received since the November meeting of the Committee FRS on the open market, shows that the labor market continues to strengthen, and economic activity is growing at a steady pace this year”, — stated in a statement on Wednesday, the message of the financial regulator following the meeting of its leadership.

At the same time the fed also points to a rapid decline in unemployment than expected. “Associated with natural disasters the destruction and restoration of the affected economic activity, employment and inflation in recent months but not significantly changed the rate of the economy as a whole”, — noted in the fed statement.

This is the fed’s decision was quite predictable. So, only 4 of the 97 surveyed by Bloomberg experts expect the saving rate will remain unchanged, and all the rest predicted the rate increase to 1.25-1.5% per annum.

The current fed’s decision to raise rates for the third time already from the beginning of 2017.

The regulator raised the rate in June to 1-1. 25% in March to 0.75-1% per annum. Previously, the rate of increase of the rate was slower: the rate increased one-time and in 2016, and in 2015. In 2007-2008 the fed because of the need to stimulate economic growth gradually lowered the rate. In December 2008, the rate hit a low of 0-0,25%.

In 2018, experts predict that the rate will be raised to the level of 2.25%. The economic situation in the US will allow the U.S. regulator to take this step. The fed expects stronger economic growth in the country in 2018, with a projected earlier of 2.1% to 2.5%, said Wednesday the Chairman of the Board of governors of the Federal reserve Janet Yellen.

“We expect the pace of economic growth in the US next year with a projected in September of 2.1% to 2.5%. The unemployment rate will decline to 3.9% from the current level of 4.1 percent,” she said. The unemployment rate in the U.S. is the lowest in 16 years.

Given that December 15 will be a meeting of the Board of Directors of the Central Bank, which the Russian regulator can lower the rate, the fed decision may lead to the withdrawal of foreign investors from Russian assets since such investments will give investors much lower returns and are less interesting.

As noted recently at session of economic club FBK, the Director of the Institute of strategic analysis Igor Nikolaev, “the stability of the ruble” this year was achieved due to the inflow of funds operations carry trade. By estimations of participants of the market, the share of non-market Federal loan bonds (OFZ) exceeds 30%.

In this gradual rate hike by the fed will add ruble instability.

In addition, in November of this year, the Ministry of Finance has received a lot of additional oil and gas revenues. So much that by the end of December will be directed on purchase of currency by nearly 204 billion rubles This is a record figure since February, when the Finance Ministry released the foreign exchange market. The amount of such intervention in this case two times the amount of purchases in November, says the analyst of “ALOR Broker” Alexey Antonov.

The intervention of the Ministry of Finance in December, will also play against the ruble. Respondents informed “Газетой.Ru” analysts noted that the actions of the Finance Department will be another factor that lead to the weakening of Russian national currency. The only question is the timing and the scale of the fall.

“In my opinion, the effect will be noticeable, but not predominant. At the end of the year will increase the activity of importers and banks, which will have a stronger effect on the ruble. The actions of the Ministry of Finance will lead to growth in trading volume on average by 6%,” — commented earlier, Georgiy Vaschenko, head of operations on the Russian stock market IR “freedom Finance”. By the end of this year, the expert was expecting a course in the area of 60,50 rubles per dollar.

The dollar on the Moscow exchange is now 58,61 rubles.


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