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17 Jul 2015
Volatility expected to increase around RUB – Goldman Sachs
FXStreet (Edinburgh) - Volatility around the Russian currency could pick up pace in the upcoming periods, according to analysts at Goldman Sachs.
Key Quotes
“The CBR aims to bring inflation to 4% by 2017 using the key rate as its main instrument”.
“The Bank maintains that it is not in any way targeting the currency. However, it has also announced that it intends to accumulate FX reserves in the coming years to grow them back to US$500bn in 5-7 years, and it has been buying FX at a rate of about US$200mn a day since mid-May”.
“The main cost of the CBR’s aim to accumulate reserves, in our view, is that it signals reservation to use the reserves to defend the currency”.
“Everything else equal, this increases the potential volatility of the RUB and rates in the event of a shock”.
Key Quotes
“The CBR aims to bring inflation to 4% by 2017 using the key rate as its main instrument”.
“The Bank maintains that it is not in any way targeting the currency. However, it has also announced that it intends to accumulate FX reserves in the coming years to grow them back to US$500bn in 5-7 years, and it has been buying FX at a rate of about US$200mn a day since mid-May”.
“The main cost of the CBR’s aim to accumulate reserves, in our view, is that it signals reservation to use the reserves to defend the currency”.
“Everything else equal, this increases the potential volatility of the RUB and rates in the event of a shock”.