Russia » Economics
Author`s name Michael Simpson

Will Dollar Go Down More?

Russia stops playing against the dollar
The present-day situation on the currency markets is rather unstable. We can now conjecture only whether the dollar has already passed the lowest landslide point and is now going up, or the second day of the dollar increase is just a short stop of the dollar's descent.

Somehow or other, the dollar-to-euro rate has finally reached the maximum point over the last month. Analysts say that investors have become optimistic because of the registered speed-up in America's economic growth. It is rather illusive by the way. Yesterday one euro cost 1.1586 dollar at the Asian trades. According to Bloomberg, the rate was registered at the level of 1.1691 dollar for a euro in New York the day before.

The dollar rate with respect to the world's main currencies went up at yesterday's morning trades in Sydney. Analysts say that the dollar increase is explained with expectations that the Federal Reserve may reduce the rate not by 0.50% but by not more than 0.25%.

Oreanda, Russia's news agency reports that now the market is looking forward to more economic facts that are to be published in the USA very soon. In particular, an analyst with ANZ Bank says that March accounts current that are to be published may make the economic situation clearer and they will probably become a turning point. However, as experience shows, these expectations may collapse even despite of the fact that the USA is doing its best. If the expectations of a lower rate fixed by the Federal Reserve collapse the situation may seriously change once again.

On the other hand, First Deputy Managing Director of IMF Ann Krueger, who is visiting Moscow now, says that weakening of the dollar rate was not to cause such an alarm on the world markets. After all, Ann Krueger says, the dollar is getting weak just with respect to the euro. That is why one may say the dollar is stable, and it is the European currency that is going up to reach the originally fixed rate of 1.17 dollar for a euro. As is seen from Ann Krueger's interview to ITAR-TASS, being an official of the International Monetary Fund she is keeping up a PR campaign in support of the dollar. The PR campaign has been recently started by IMF Managing Director Horst Koehler. 

After a continuous decline of the dollar-to-ruble rate in Russia, the situation has stabilized. What is more, traders say that intervention of the RF Central Bank and excess of rubles in banks will prevent speculations for fall of the dollar-to-ruble rate.

The press-service of the Moscow Interbank Currency Exchange (MICEX) reports, the weighted average exchange rate of "tomorrow" deals made up 30.3807 rubles for a dollar at 11:30 am yesterday. The rate reduced by 0.007 kopecks as compared with Wednesday's rate. 

Traders explain the situation with the Central Bank's intervention. They say, the Bank of Russia has interfered in the trades and prevented the dollar rate from further decline. Doing so, the Central Bank of Russia demonstrates it is now satisfied with the rate of 30.38 rubles for one dollar and that the rate meets Russia's economic interests.

There is an opinion on the market that in the nearest days all attempts to speculate for the dollar fall will stop or at least get much weaker.