The ruble last trading week consolidated below 74 per dollar on expectations of de-escalation of relations with the US. The meeting between the foreign ministers of the Russian Federation and the United States and the planned summit of the leaders of the two countries give some confidence that the ruble may outstrip a number of other emerging market currencies. In the US, fund managers’ long ruble hit a 15-month high.
How optimistic are the prospects for further strengthening of the ruble exchange rate? Andrey Maslov, an analyst at FINAM Group, answered the question of Fortrader magazine.
– At the moment, the ruble continues to strengthen both against the background of rising oil prices and due to a decrease in the geopolitical component. As for the first, despite the statements that the negotiations between Iran and the United States are progressing in a positive way for both countries, some experts believe that the progress of the negotiations may come to naught due to the decision of the Iranian authorities to limit the IAEA’s activities on monitoring nuclear facilities in the country. However, here it is worth understanding that, most likely, the sanctions can really be lifted from Iran, since President Biden promised this in his election campaign and seeks to fulfill the promise.
In addition, the progress of vaccinations in Europe and the United States could potentially lead to an increase in demand for energy in general and oil in particular, closer to III quarter of this year, which, in turn, will have a positive effect on the Russian currency (if the acute phase of the coronavirus in Asia ends). On the geopolitical side, the Lavrov-Blinken meeting has encouraged investors about a potential meeting between Putin and Biden this summer. It is also worth mentioning that the United States did not impose sanctions on the operating company in laying the Nord Stream 2 pipeline, but managed with targeted sanctions against pipe-laying vessels, probably making concessions to Germany.
In addition, it should be noted that now short-term support for the Russian currency is provided by VAT payments for I quarter of the current year, as well as income tax for April and May.
All this gives hope that the ruble will really be able to reach the level of 70 rubles. for the dollar. However, concerns are raised by the events in Belarus, where the company’s plane was forcibly landed. Ryanair, and the oppositionist flying on it was detained. A number of world politicians have already come out in favor of declaring the airspace over Belarus a no-fly zone for European airlines, and also called for the release of a political prisoner. In addition, on May 24-25, the leaders of the EU countries will discuss the possibility of introducing new sanctions against Russia. Against this background, many expect Russia’s intervention in this situation, and in this case the ruble will again be above 75 rubles. for the dollar.