Over the past two days, the US dollar has fallen by more than 1%. Currently, the OTC USDRUB rate is trading near 82.75.
Why the Ruble is Strengthening Again
Firstly, it appears the market has shifted its sentiment regarding the interest rate. To recall, before the Central Bank’s decision on September 12, the market was more optimistic. However, the Central Bank indicated that there is nothing more to gain and that the rate will not sharply decrease further. The situation worsened with news about VAT — starting next year, the rate will increase by 2 percentage points.
Secondly, it is important to remember the tax period. Today is the deadline for mineral extraction tax payments, which means demand for the ruble is high.
Thirdly, the US dollar is falling on exchanges. August was a poor month for the dollar, with a 2.2% decline. There was growth in July, but June was very weak. In short, the dollar is falling across the board, although this alone is a weak argument for ruble strengthening.
Inflation for the week of September 16 to 22 was 0.08%. On an annual basis, official price growth has dropped to less than 8%. The persistent problem remains gasoline, which has risen 12.03% year-on-year. A. Novak announced that the ban on fuel exports has been extended until the end of this year. It is worth recalling that the price increase is due to strikes on Russian refineries and seasonal factors increasing fuel demand.
Russian Stock Market
The Moscow Exchange index is essentially flat, hovering around 2730 points. A positive sign, as we understand, is that the index has not broken below the 2700-point mark. At the same time, consolidation has begun, meaning no decisive movement has occurred yet.
Over the week, the Electricity and Chemical & Petrochemical sectors showed decent growth. PhosAgro provided strong support in the chemical sector. The company’s shareholder register closes on October 1, and on September 12, a dividend payment of 273 rubles was approved. At the current rate, this yields a dividend return of about 3.7%.
The Metals and Mining sector underperformed the market, falling by 3.4%.
The Real Estate sector also performed poorly, with its index declining by 2.3%.
The oil sector grew nearly 1%. This rise may also be supported by improving conditions in the oil market. On Friday, Brent crude attempted to break above $70 per barrel. However, prices reversed downward yesterday due to the upcoming OPEC+ meeting scheduled for Sunday, October 5.
That is all for now. News is limited, and we continue to monitor the situation.
