Counter-speculation on the Ruble ( A traduzir )
Posté par Jacques Sapir Le 23 décembre 2014 @ 23:48 Dans En Anglais,In English,Notes,Politiques de développement,Russie,Théorie économique | Pas de commentaire
Note kindly translated by Anne Marie de Grazia
The day of Monday 22nd witnessed the sustained rising movement of the Ruble. It was even noteworthy by a speculation IN FAVOR of the Ruble and AGAINST the US Dollar as is proven by the movements on the exchange market. We are seeing a spectacular reversal of last week’s situation. This reversal leaves all the “experts” who, like birds of ill omen, have been relentlessly forecasting the worst for the Russian economy, with their jaws dropping. It confirms the trust that one can maintain in the fundamentals of the Russian economy, which remain quite healthy. A little explanation of what happened remains nevertheless in order.
As a matter of fact, the day begins with an exchange rate at 58 rubles for 1 USD. The speculators sell their dollars and massively buy rubles before the beginning of the session, which brings the exchange rate to fall to 56 r/1 USD within minutes, thus creating an appreciation of the ruble. It goes up after these buyings, then starts appreciating again and reaches 54,5 rubles pour 1 USD around 15h. The speculators then sell their rubles in order to buy dollars, provoking a rise of the exchange rate to 56r/1USD but the demand on the ruble is such that this depreciation of the ruble doesn’t last and it rises back, at the end of the session, to the vicinity of 54r/1USD.
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Obviously, this process is the result of the counter-attack led by the authorities since last Wednesday. It also corresponds to the formalizing of the announcement of the support of the Central Bank of China (the PBOC) guaranteeing the Central Bank of Russia, whose reserves are already considerable, that it will be able to count on the immense financial manoeuvring resources of the PBOC (the reserves of which are estimated at 4000 billion dollars). It is quite clear that there is no longer a future for a speculation against the ruble. But there are still speculators on the markets. The latter therefore decided to play in favor of the ruble. One can, and one must, consider this to be a positive sign, but a few things must be heeded:
The day of Monday 22nd witnessed the sustained rising movement of the Ruble. It was even noteworthy by a speculation IN FAVOR of the Ruble and AGAINST the US Dollar as is proven by the movements on the exchange market. We are seeing a spectacular reversal of last week’s situation. This reversal leaves all the “experts” who, like birds of ill omen, have been relentlessly forecasting the worst for the Russian economy, with their jaws dropping. It confirms the trust that one can maintain in the fundamentals of the Russian economy, which remain quite healthy. A little explanation of what happened remains nevertheless in order.
As a matter of fact, the day begins with an exchange rate at 58 rubles for 1 USD. The speculators sell their dollars and massively buy rubles before the beginning of the session, which brings the exchange rate to fall to 56 r/1 USD within minutes, thus creating an appreciation of the ruble. It goes up after these buyings, then starts appreciating again and reaches 54,5 rubles pour 1 USD around 15h. The speculators then sell their rubles in order to buy dollars, provoking a rise of the exchange rate to 56r/1USD but the demand on the ruble is such that this depreciation of the ruble doesn’t last and it rises back, at the end of the session, to the vicinity of 54r/1USD.
Chart 1
Movements of the ruble against the dollar on Dec. 22
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