Currently, there is a lot going on at the international stock exchanges; not only in Europe and the United States. Also in Russia, there have been some turmoil on the markets.
Last weekend, Russian newspapers were reporting on the quickly dropping exchange rate of the Russian ruble. The following snips are from the Russian online newspaper www.RBCdaily.ru and these are translated by Google and edited by me.
On Friday, the market is not only selling the full range of stocks, but also large amounts of rubles that were in hands of foreign investors. According to analysts, the ruble is poised to continue to decline against foreign currencies.
This Friday, trade in the MICEX currency section showed a true exodus of the ruble.
Sales of the Russian currency are hot, because investors are abandoning risky assets at a massive scale: first, capital flowed out of the equity markets, then out of oil futures, and at last out of the ruble.
As a result, the official dollar rate set by the Bank of Russia today, for the first time in two weeks, crossed the bar for 28 rubles to stop at 28.338 RUR / USD, a rise of more than 50 kopecks (Russian cent). This was a bigger increase than during last week in total.
Also the exchange rate of the Euro rose to 40.10 RUR / EUR. However, the official exchange rate ended just under 40RUR/EUR: 39.9625 RUB / EUR.
"The current exchange rate of the dollar is advantageous for exporters, but we can not rule out further weakening of the ruble, due to the growing uncertainty in the world markets and the falling prices for commodities", according to analysts of VTB Capital.
Head of Treasury of the Russian bank Metalinvestbanka, Selim Agarzaev said that the market volatility has increased, largely due to massive selling of the ruble by non-residents of Russia. But, according to Agarzaev, the ruble is still very strong. Perhaps it would even be useful when the economy weakens slightly. "The market situation is not catastrophic yet, but that might be so if the oil prices would further drop," said the expert.
, the world’s largest oil producer, set a post-Soviet record for yearly crude output in 2010, even as the country’s production in December slipped from the previous month.
Chart courtesy of www.ycharts.com: click to enlarge