Russia » Economics
Author`s name Ольга Савка

Russian Exporters To Make Dollar Slide Over Money Shortage

World market are being nervous about the American currency

Summer is not the best time for the peak of the business activity. However, objective processes take place according to their own objective trends, and seasonal changes are not an issue in this respect. The situation with the American currency has not changed much at the end of the first summer month: the dollar is still weak, despite inconsiderable fluctuations of the rate.

Summing up June results, the Russian Central Bank said that the dollar had dropped by 1.3 percent vs. the ruble. Since the beginning of the year, the US dollar has reduced by 3.4 percent against the Russian ruble. The public relations department of the Russian Central Bank said that the dollar reduction had been totally compensated with the sudden strengthening of the euro. On the other hand, the real efficient ruble rate has slipped by 2.6 percent.

According to June results, the net purchase of the foreign currency by the Central Bank of Russia has reached the maximum level on the home market this year. As a result, the volume of gold and forex reserves had raised up to $64.9 billion by June 1, 2003. Russian gold and forex reserves have gained $17.1 billion since the beginning of the year, RIA Oreanda reports.

On Friday, the American dollar raised a little, and the Central Bank announced the official dollar rate for Monday on the level of 30.3483 rubles per dollar. The official euro rate was set on the level of 34.7124 rubles per one euro.

The market development has been rather weak these days, but it was an unexpected event for experts, taking into consideration the factor of the quarter and half year end. Currency market analysts estimated, banks had to deal with excessive rubles again. A part of those funds was invested in the money market, which eventually boosted the demand on the American currency. In addition to it, one should not forget the dollar strengthening on the world market after the reduction of the US Federal Reserve System rates.

Last Thursday, when the currency market was thinking over the decision of the US Federal Reserve System to reduce the rate on federal funds by 0.25 interest points, the dollar managed to enter the level 1.143 - 1.145 dollars per euro. The USD raised to 1.1421 dollars per euro in New York. However, the dollar rate slid down to 1.145 dollars per euro on the Asian tender on Friday. Experts think that such a reduction was directly connected with the fixed profit on the American currency. On the one hand, traders were nervous before the publication of the data about consuming sentiments in the USA. On the other hand, they were closing their positions before the end of the quarter. The reduction of the US dollar led to another outburst of its purchase. As a result, the American dollar rate has entered the level of 1.141 - 1.143 dollars per euro, K2Kapital news agency said. The dollar was traded on the level of 1.1424 dollars per euro at the evening session in New York on Friday, in comparison with the previous level of 1.1421 dollars per one euro.

Dow Jones Newswires reported, the decision of the Federal Reserve System supported the dollar vs. the euro. However, market members do not know, what the current strengthening of the dollar means - whether it is the start of a new trend or the lowest level for the euro. The uncertainty of the traders reflects different directions of the money market. Optimistic specialists say that certain prerequisites have appeared in the American economy to speed up the economic growth, whereas the eurozone economy was experiencing a standstill. Optimists also forecast that the euro will slide to 1.10 dollars per euro by the end of the year.

Pessimistic views about the dollar perspective are connected with its fundamental flaw - a huge deficit of the current balance of payment of the USA, which has to be funded at the expense of the foreign capital inflow. Other specialists believe that the situation with the American dollar will depend on the economic news about the perspective of the economic growth in the USA and another possible reduction of the Federal Reserve System rate.

According to experts' estimates, the situation on the Russian market is still complicated on account of the real opportunity for the export currency profit to be sold massively. The Russian gas giant Gazprom has recently announced about the growth of its own losses because of the rate difference and the ruble shortage. The further strengthening of the ruble is not profitable for exporters at all, they have no other way out, so they will have to find the lacking funds with the help of currency sales. In case if the market does not experience a significant recession, experts forecast the further growth, up to 30.38-30.39 rubles per dollar.

In an exclusive interview with Pravda.Ru, US filmmaker talks to Edu Montesanti on the presidential elections in the Caribbean country, and its importance to Latin America. "The left will come back in Latin America, more likely sooner than later," says Oliver Stone

Exclusive Interview: Oliver Stone on Venezuelan Election

In an exclusive interview with Pravda.Ru, US filmmaker talks to Edu Montesanti on the presidential elections in the Caribbean country, and its importance to Latin America. "The left will come back in Latin America, more likely sooner than later," says Oliver Stone

Exclusive Interview: Oliver Stone on Venezuelan Election
Comments
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Foreign Ministry official explains why Russia had to sell Alaska to US
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
British football fans spineless to unleash World War Three in Russia during World Cup
Pentagon's goal in the Middle East is to trigger major war between Israel and Iran
Venezuela may expect another Panama scenario from 1989
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
Kremlin on failed nuclear missile tests: 'Listen to President Putin and believe him!'
US installs laser guns on its warships
The Royal Wedding and the Silly Season
Foreign Ministry official explains why Russia had to sell Alaska to US
Venezuela may expect another Panama scenario from 1989
Venezuela may expect another Panama scenario from 1989
Venezuela may expect another Panama scenario from 1989
Venezuela may expect another Panama scenario from 1989
Venezuela may expect another Panama scenario from 1989