Sberbank CIB called fair rate broken loose from the oil of the ruble

According to analysts Sberbank CIB, the fair rate of the national currency is 72 rubles per dollar at the current average oil prices.

2 August the price of Brent crude oil rose more than 17% from $41.5 per to almost $50 per barrel, however, in this period, when there was a recovery in oil prices, the ruble appreciated by only 4.9%, and map Analytics. This suggests that the correlation rate of the ruble to the price of oil fell below 50%, which is the lowest value since may 2014, according to a review of Sberbank CIB. Experts note that in late July, in particular, the strengthening of the ruble does not help investor sentiment due to the possible deterioration of the situation in the East of Ukraine.

However, in July the ruble was also strengthened through the supply of foreign currency from exporters, the payment of dividends and tax payments. “However, this does not indicate that the Russian currency is undervalued. If you focus on the size of the expected year-end budget deficit of 3,5% of GDP, this suggests that the ruble is overvalued given current oil prices”, — stated in the review.

Due to the low correlation of oil price and the ruble exchange rate even when oil prices exceeded level of $50 per barrel, it is hardly possible to expect strengthening of the national currency to more than 63 rubles to the dollar, analysts say.

Earlier, on 16 August wrote that now support the ruble carry trade operations and banks, using the output of foreign assets to replace the outflow of funds from accounts of companies. Raiffeisenbank expect a further weakening of the ruble in stable oil in late August — early September.

Chief economist of Alfa Bank Natalia Orlova fully agree that the fundamental values of the national currency above the current level. It is estimated that they account for about 70 rubles per dollar, and the ruble may be at this level if the Bank of Russia will not fulfill the targets for inflation (5-6% by the end of 2016 and 4% by the end of 2017) or will increase inflation expectations. According to Orlova, now the course really should not be tied only to the oil price. “The big influence now is the capital account,” — she said.

According to EDB’s chief economist Yaroslav Lisovolik, “on the side of the ruble lower capital outflow than last year.” While there are risks with the tightening external environment, namely the fed rate hike, which could lead to the weakening of the ruble, shares the concerns of the economist. Also there is a budget factor is the growth of excess liquidity can contribute to the pressure on the ruble and contribute to its impairment. “In order for the rouble out of its range and reached values, which says Sberbank CIB, all of these factors weakening of the ruble should be implemented in full”, — said Lissovolik.

However, the chief economist of “Renaissance Capital” Oleg Kuzmin believes that the current exchange rate of the ruble could be called fair. In order to course was below 72 rubles to the dollar, oil should cost less than $40, according to the economist. Because the rate of the national currency is now fair, agrees an analyst at Nordea Bank Denis Davydov. “But we believe that in September the correlation between oil price and exchange rate should increase, so as finally to end dividend payments and leave the increased demand for dollars”, — says Davydov.