The reduction in the rate of the Central Bank increased the volatility of the ruble


A steady flow of currency trading on the Moscow exchange on Friday after the publication of the Central Bank’s decision to reduce the key interest rate gave way to sharp fluctuations.

Immediately after the news release about the rate of the dollar and the Euro rose against the ruble by about 20 kopecks., but then plummeted, falling significantly below the level of the previous day’s close of trading. At a minimum, the Euro dropped to a mark of 72.48 RUB 27 kopecks below the closing level of trading Thursday and more than 84 kopecks. less than the one recorded on the morning of Friday high. Simultaneously, the dollar was close to 64 rubles, losing about 80 kopecks compared to the morning maximum. At the peak of the fall of the dollar fell to 64,1075 RUB 22 kopecks below the closing level Thursday.

After that, the dollar and the Euro went up again. For the next two hours the dollar on the Moscow stock exchange has risen to 64.7 RUB, EUR — RUB to 73,2 But to stabilize at this level, courses failed, and they fell by about 30 COP., then went up again.

The price of oil in this time practically has not changed, that confirms the communication of a burst of volatility in the market with the Bank of Russia decision to reduce the key rate, said the head of the dealing center of Metallinvestbank Sergey Romanchuk.

“Immediately after the decision, the dollar jumped a little. Most likely, this was due to the work of “robots”, which saw a decrease in the interest rate and automatically sold the ruble and bought the currency. Then the ruble in half an hour pretty significantly strengthened. I think that this is due to the fact that the market reacted positively to the decision of the Central Bank. If the Central Bank continued not to pay attention to the fundamental picture of the economy, it would create more questions to that, how did the regulator make a decision”, — said Romanchuk.

Further fluctuations in currency exchange rates Romanchuk explained by the statement of the head of the Central Bank Elvira Nabiullina that today’s rate reduction does not necessarily mean lower rates in the future, then optimism of players has fallen slightly.

“A single movement direction yet on the market,” said Romanchuk, noting that the volatility in the foreign exchange market will continue until the end of the day, as some investors need more time to make the decision.

Earlier, the Central Bank in its “financial stability Review stated that it is impossible to exclude “new waves” of volatility in global markets, and analysts linked the risk of its increase, with possible increase of rate FRS the USA.

Sberbank CIB analysts Tom Levinson and Iskander Lutsk on the eve of the meeting of the Board of Directors of the Central Bank of the Russian Federation noted that the first reaction to the rate cut will be “growth of the pair dollar/ruble, which would then be offset by a proposal from the residents”. Analysts believe that the ruble has support as a result of the demand for ruble bonds, but in the absence of certainty about the start date, a serious easing of monetary policy of the Central Bank, “this rate will become irrelevant, and the dollar can rise to 65 rubles.

On Friday, June 10, the Board of Directors of the Central Bank lowered its key rate by 0.5 percentage points to 10.5% per annum. The key rate fell for the first time from July 2015.