The value of the currencies of many emerging markets could fall even more if the fall in the US stock market as a result of the pandemic coronavirus infection COVID-19 will be as large as during the global crisis of 2007-2008, warns Bloomberg.
The analysts of the Agency indicate that the most vulnerable are the currencies of countries with current account deficits and relatively illiquid financial markets, according to RBC.
In this case, the ruble has a negative impact primarily the fall in world oil prices.
Furthermore, Bloomberg predicts, the dollar, which in recent weeks has grown to the Russian national currency by 18%, could add another 29.5 per cent. Thus, do not rule out the Agency, counting from the current trigger, at around 75 rubles per dollar, it could rise till around 97 roubles.
Recall, March 9, 2020, the financial and oil markets suffered “black Monday.” May futures for North sea petroleum mix Brent has fallen in the night of March 9, from 31% from Friday’s $45 to $31. A sharp fall occurred due to the fact that the countries of the OPEC Alliance+ are unable March 6 to agree on cutting oil production, nor of the extension of the deal for a longer period (after 31 March). Moreover, Saudi Arabia announced plans to increase production and lower oil prices. Against this background, the international monetary market (Russian was closed for the day) started to panic, the exchange rate of the Russian national currency during the day fell to 86 rubles per Euro and up to 75 per U.S. dollar. Monday night losses could partially win back. At the end of trading on March 10, the dollar and the Euro has risen by only 5 to 5.5%, so that did not happen, and repetition “black Tuesday” of 2014, when the exchange rates on the stock exchange for the day jumped by 38-48%, and the Euro reached 100 rubles. This devaluation of Russian national currency continues, and the markets are falling, including on concerns about the impact of the pandemic coronavirus COVID-19 on the global economy.
Meanwhile, says the Director of the Academy of management Finance and investment Arseniy Dadashev, “the ruble falls again, yielding a new wave of flight from risk that swept the markets at the beginning of the new trading week, which promises to be no less challenging for investors.”
For his part, the Deputy head of IAC “Alpari” Natalia Milchakova complains that “another sharp decline in the interest rate corridor of the U.S. Federal reserve to 0-0. 25% had neither the ruble nor the Russian stock market have no influence”. “The currency markets of developing countries are scared that the pandemic coronavirus Covid-19 that has spread far beyond China, can significantly slow down the growth of the global economy and reduce demand for raw materials”, — said in the review expert.
According to “Finmarket” analysts “BKS global markets” believe that the decline in oil prices to $30 per barrel or below will lead to the weakening of the ruble to 75-79 rubles per dollar.
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