#17 - JRL 7247
Russia unconcerned about rouble exchange rate against dollar, euro
July 14, 2003
The rouble exchange rate against the U.S. dollar plunged deeply on Monday, its deepest fall since the beginning of the year in conditions of a high speculative demand for the dollars on the part of the banks prompted by the strengthening of the U.S. dollar position against the euro on the international market, as well as by the temporary reduction of sales of hard currency to the banks by the Russian exporters.
The PRIME-TASS economic news agency reported on Monday that the official rouble exchange rate announced by the Central Bank of the Russian Federation at 11.30 Moscow time plunged by 11.47 kopeks to 30.4955 roubles. The traded volume was high, amounting to some 25 million dollars at 12.00 Moscow time.
In Europe, the euro exchange rate against the dollar dropped to a six-week low of 1.1250 euros, that is 5 percent lower than the historical low 1.1935 euros in May.
Alba-Alyans bank dealer Artyom Roshchin, the dollar's jump on Monday was largely speculative in character as attempts were being made to tie it down to the weakening of the euro of the international market.
Analysts of the investment bank "Trust" for their part also noted that the American currency made yet another attempt on Monday at fixing its rate above the 30.40 roubles level in the wake of the new consolidation of the dollar position of the international market.
The dollar is backed on the Russian market by the fact that the exchange of the export receipts in hard currency for roubles have somewhat declined lately. According to the Alba-Alyans dealer, this decline may have been come hot in the hills of the Central Bank reduction of the mandatory proportion of such exchange from 50 percent to 25 percent of the export revenues. It is possible also that the clients are occupying a wait-and-see stance in the hope for selling their dollars at a profit later.
At the same time, there is an important factor that still continues to favor rouble's firm rate - the oil prices continue to grow, which means that they inflow of export earnings to Russia will not run out in the immediate future. Thus there are no fundamental reasons why the rouble should grow weaker, Roshchin noted.
This is why, said he, it is too early to speak about any global trend reversal on the Russian currency market. It is hardly plausible that the rouble exchange rate would leave the range of 30.30-30.50 to the dollar in the next few days.