TSB noted the low activity of the financial speculators in the Russian market

Carry trade operations had no significant impact on the strengthening of the ruble in the first quarter of 2017, said first Deputy Chairman of the Bank of Russia Ksenia Yudaeva on the financial stability Forum, the correspondent . “The strengthening of the ruble that we saw in the first quarter of 2017, primarily due to inflows of foreign currency through the channels of foreign trade, and to a much lesser extent was due to other factors, including carry trade”, she said.

Carry trade is one of the types of financial speculation based on the fact that different countries have different money market rates. Speculators borrow money in a country with a low rate and invest it in a country with a higher.

Yudaeva noted that in many countries, including Russia, improved dynamics of the index of attractiveness of the carry trade mechanism. The growth of this index for Russia, in her words, connected not so much with the change of the interest rate differential, but with the lower volatility of the ruble. “In connection with these changes, the question arose about the volume and potential sustainability of capital inflows into Russia. The statistics do not confirm the hypothesis of a massive flow of carry traders on the Russian market”, — says the first Deputy Chairman of the Central Bank.

According to preliminary estimates of the balance of payments, the surplus on the current account in the first quarter of 2017 amounted to $22.8 billion, capital outflows of $15.4 billion, “the Russian banks, on account of which received export revenue, placed her in the form of foreign assets, mainly deposits of banks-correspondents”, — she added.

Yudaeva also said that Russian economy there are markets where the share of non-residents has been growing recently, in particular, it is increasing in the OFZ market.

“According to statistics, from October 2016, the proportion of non-residents in OFZ increased by 2 percentage points to 29% when data for 6 April 2017. It is unlikely that such growth can be considered high. I would note that the yield of OFZ remain approximately at a constant level from October 2016, despite the fact that the volume of net borrowing Ministry of Finance in this period was quite large. It says that the main players in this market are Russian banks, and that competition with foreign players helps to keep government bonds from rising yields, despite the offer”, — said Yudaeva.

A significant part of the inflow of foreign capital into the OFZ market may be quite stable, which is associated with the recovery of the Russian economy and improving investor confidence in policy, says Yudaeva.

To monitor the situation, the Central Bank conducted a survey of foreign investors regarding their strategy for investment in sovereign Russian bonds. “This survey confirmed the hypothesis that there is a significant portion of investors that buy Russian Federal loan bonds, allowing their sale to maturity, and we accept such risks in their policies. To reduce them it is necessary to conduct clear and predictable policy”, — said the first Deputy Chairman. This is important because the situation on global markets remains fragile due to economic and trade policies of the USA and instability in the Chinese economy, Yudaeva concluded.