Currency game bother CB

Speculate on the Russian currency market is not profitable within one to two years promised to the first deputy chairman of the Central Bank of Russia Alexey Ulyukayev. "If the differential in interest rates to fall to 2-3 percentage points, it would mean a serious weakening of motivation (for speculators - Ed.). This may occur in the relatively near future - a year or two, "- he said. Now the difference between Russian and the world's major rate reaches 6%. The base rate CBR set at 6.75% and the rate of the European Central Bank is 1%, Fed rates and the Central Bank of Japan, generally close to zero. Thus, the speculator can take a cheap dollar at a zero rate, and buying rubles and invest them in the Russian market at high rates. The yield on the bonds of high-quality issuers could reach 12%. "on deposits Bank rates reach 4-4,5%. A key rate securities are still very high. The ruble remains an attractive currency for speculators, "- commented Bank.ru Nicholas Podguzov, an analyst at Renaissance Capital." The market this strategy is called carry trade. "As a result, the market receives a lot of speculative capital, the ruble is greatly strengthened. Moreover, the growth rate of our national currency does not correspond to the situation in the Russian economy. Speculative capital may at any time to leave. That is, the excessive strengthening of the ruble carries a risk of sharp fall in the negative dynamics of oil prices "- explains Podguzov. CBR expects capital inflow to Russia in November-December 2009, at $ 10 billion, said Alexei Ulyukayev. Between by private capital outflows from Russia for 10 months was 53 billion dollars Moreover, monetary authorities are not going to take tough measures to limit the carry trade transactions in the Russian currency market. "There are no deadlines, criteria, red flags, none of these things," - said Ulyukave. According to him, the Bank of Russia may set higher requirements for banks to statutory transfers to the obligatory reserve fund (CDF) on foreign loans and limit open currency positions. That is, banks will be forced to divert more foreign currency purchased in the Fort and , respectively, in the free market will be less dollars. But the introduction of any measures should be preceded by much discussion, said a senior official of the Bank of Russia. against direct measures of currency regulation and made the head of the Central Bank Sergey Ignatiev "I am opposed to the resumption of foreign exchange regulation. There are other measures, the softer, non-monetary adjustment, which can slow down the inflow of such capital, for example, monitoring of debt of Russian companies and banks ", - said Ignatiev. In order to reduce the rate of the ruble, the attractiveness of currency speculation, the Bank of Russia has been gradually reduces the refinancing rate. "And the movement of our interest rates down, and more free rate fixing are creating less incentive for short-term capital flows and provide a stable financial structure," - said Ulyukaev. "I do not rule out reducing the refinancing rate in November," - he told reporters . refinancing rate is now 9.5%, the last time it was lowered on Oct. 30 by 0,5%. "In my opinion, the Bank of Russia could cut rates soon. However, our Central Bank holds a conservative policy. We must not forget that he has two main tasks. Home now - stimulate lending activity, including by reducing rates. But there is another purpose - to prevent inflation. In the first half of the year because of the devaluation of the ruble inflation risk was great enough, so the Central Bank in no hurry to cut rates. Only after it became apparent slowdown in inflation in the country, they decided to do it, "- says Podguzov. On this logic, witness statements predstaiteley CB. In its interest rate policy the Bank of Russia is guided by the assessment ratio of the risk of inflation and the risk of economic depression, said Ulyukaev. "This year and the first half of 2010, inflation risks are low and the risks of an unstable economic recovery are high. Therefore, a rapid decline in interest rates is justified - and in this and next year we have the opportunity to continue this movement "- Ulyukaev said." I think while we are doing everything correctly. A certain caution here (at lower rates - Ed.) Does not interfere with - much less sharply lower interest rates, and then have to raise them, "- said the head of the Central Bank, responding to a question about the possibility of more aggressive rate reductions by the Central Bank's press conference. The Bank of Russia will reduce refinancing rate next year is below 9% in only if inflation expectations are low, assured Ignatieff. While officials and journalists to discuss the problem of speculative capital and the strengthening of the ruble, most experts believe that the situation in the near future will not change. "In my opinion , the probability of growth of the ruble higher than its decline. Liquidity in world markets much cheaper dollar will continue to come to our market ", - convinced Podguzov." Authorities will try to do everything possible to smooth the process of strengthening the Russian currency, but it is very difficult to swim against the tide. The influx of capital is too big "- told Bloomberg Guillaume Tresca, emerging markets strategist at Calyon, the investment banking division of Credit Agricole SA. In October, the ruble has strengthened against the U.S. dollar by 3.4%. Moreover, inflation amounted to 9,7% in annualized basis. This is the lowest figure for 2 years. The price of Urals oil has increased by 86% since the beginning of 2009 only for 17 days in November, the Central Bank of Russia during the intervention in the currency market had to buy $ 6 billion, said the head of the Central Bank of Russia Sergey Ignatiev . He said that during October the Central Bank purchased foreign exchange market of approximately $ 16 billion, "says Ruble appreciation of the continued inflow of speculative capital into the Russian market", - states analysts PSB. "Recently, the head of the Federal Reserve of St. Louis Dzh.Ballard, said that the regulator can probably start to raise rates before 2012 are not the risk of bubbles in the economy with long-term preservation rates at low levels remains an important argument for tightening monetary policy, said Fed officials. "This statement was seen players like increasing inflationary pressures on the U.S. economy ", - experts believe" PSB "This means that the pressure on the dollar will continue and the U.S. currency will remain all the same cheap, at least until 2012. So that speculators will still long to play in their currency roulette.