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Ruble’s Future May Be Clear Soon
November cost the Russian international reserves fell $28.86 billion, according to the monthly report published by the Central Bank. On December 1, the reserves stood at $455.73 billion, down 5.96 percent from $484.59 billion a month earlier. Beginning Monday, the lower boundary of support for the two-currency basket ($0.55+ˆ0.45) will be 31.60 rubles. It was 31.30 rubles on November 24. December will be a decisive month for the Central Bank’s managed devaluation plan, which was developed for oil prices 20-25 percent higher than the current level below $40 per barrel of Urals ($36 on Friday).
In September, the reserves fell 4.36 percent ($25.4 billion), and in October, they lost 12.98 percent. Thus, they have lost almost 20 percent in three months. The Central Banks obligations are shrinking more slowly, so its policy for keeping the balance between its rubles to the dollars in the reserves has become a thing of the past. It is not yet clear what guiding principle the Bank will adopt for its policy in 2009. The lower oil prices also change the situation drastically.
The latest data on Russian import and export date to October. At that time, the trade balance was sinking simultaneously with export to $16 billion. Imports were growing rather briskly still. The early data on oil exports in November indicate that it may be down a total of 10-15 percent for the month. The level in December, with production falling as well, will be even lower than November, while factors acting on the volume of imports (lower demand for investment goods, lower public income) will not be in full force. Therefore, the trade balance for December is likely to be negative. The Central Bank is likely to take that into account in its policy.
www.kommersant.com
All the Article in Russian as of Dec. 08, 2008
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