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The Russian ruble has accelerated the decline: the cause

Российский рубль ускорил падение: названа причинаPressure on the CB increases.

Attempts of the Russian currency to strengthen after the morning’s failure to 70.16 rubles per dollar proved futile after the Russian presidential aide Andrei Belousov called for the CBR to raise the key rate meetings this year.

The dollar fell by midday to 69.7 ruble firmly fixed above 70 rubles and, despite rising in price oil has updated the maximum for 2.5 years – 70,5125 of the ruble.

The Euro rose 89 cents and reached 81,6975 rubles – a record since 29 February 2016.

The increase rate of the Central Bank to protect the ruble recipe of the crisis in 2014 would be “highly undesirable,” said Belousov.

According to the assistant to the President – the author of the idea to withdraw 500 billion rubles from chemists and metallurgists, and to balance their profitability with the oil companies, the tightening policy of the Central Bank “will hamper investment activity, economic growth, and will lead to additional expenses of the budget”.

Pressure on the CB increases, says Director of the analytical Department of “Loco-invest” Cyril Tremasov: last week, a similar statement came from the lips of Prime Minister Dmitry Medvedev.

At the Moscow financial forum, he said that the government intends to “reduce the cost of loans” and “counts on the active position of the Bank of Russia on this issue”, stressing that betting in the country is “still quite high”.

Prior to the meeting on 14 September is less than a week, and although the market is almost certain to raise rates, the Central Bank was in a very difficult situation, says Tremasov.

“Foreign investors may negatively perceive the statement Belousova,” agrees the analyst of “freedom Finance” Valery Bezuglov: it may be indicative of a lack of independence in the actions of the Central Bank that in the eyes of non-residents equate Russia with Turkey.

President Recep Tayyip Erdogan took the Central Bank under its legislative control, forbidding him to raise rates, despite the jump in inflation to 18% and the collapse of the Lira to historic lows.

The question arises whether the Russian government to fall into crisis on the Turkish scenario, asks the head of foreign exchange strategy at Commerzbank Ulrich Leichtman.

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