The dollar under 70: new US sanctions threaten giant ruble collapse

While Russian officials and oligarchs, who are in “the Kremlin list” mourned his American visa, USA has prepared the second part of the sanctions against Russia. Individual measures against high-ranking individuals was “flowers”. Now the Americans took a swing at Russian Federal loan bonds (OFZ), which, because of their high yield were eagerly bought up by foreign investors. Specific sanctions against Russian government securities can be released in the coming days. If you don’t watch. However, the Finance Ministry and the Central Bank of the Russian Federation to remain calm, saying that we even the most severe restrictions at all. But in this particular case, the undue optimism of the Russian authorities can be very costly to the Russian currency.


photo: Alex geldings

Recall that the OFZ is a government securities issued by the Central Bank of the Russian Federation and sells to investors, including foreign ones. Im US sanctions, as threatened by the local Ministry of Finance, and will not allow you to buy Russian debt, thereby investing in our economy. The Russian Finance Ministry, for its part, demonstrates composure about this ban, because hopes for domestic investors, in particular Russian banks, which allegedly wants to buy BFL. In addition, the Department is confident in the extreme interest of foreign residents high-yield Russian bonds, which do not frighten even the threat of the United States: if desired, the interested parties will bypass the restrictions by using offshore companies. At the same time in the Ministry of Finance has calculated the share of non-residents in Russian government bonds: it is 33%. But the Central Bank has calculated the volume of OFZ in the hands of foreigners — 2,183 trillion, or 32.1% of the total amount to 7 trillion roubles.

But what if the non-resident under the pressure of sanctions, this considerable volume of investments will begin to withdraw from the Russian economy? And will the risk of the ruble, confident and independent economists. In the optimistic scenario, the national currency rate will fall by 1-2 ruble against the dollar, but that if U.S. restrictions will affect the new OFZ, and the old to sell, no one will: too high their yield is over 10% per annum for 10-year and 15-year paper. By the way, because of the attractive percent of Russian bonds and was popular in European countries, the yield is much lower, not more than 2%. So, in 2017, the non-residents received in the Russian OFZ dividends for a total amount of RUB 353 billion.

More negative option if you sell bonds will begin American investors — they are decisions of the U. S. government have a direct impact. In this case, the Russian national currency will lose a projected 5 virtually any to the dollar.

And in the worst scenario, the ruble will face the biggest risk in recent time: it can fall to 8-11 virtually any. “If sanctions against BFL will affect both current and future releases, then the inaction of the Bank of Russia the risk of the ruble may reach 15-20%”, — considers the Director of analytical Department of “Alpari” Alexander Razuvaev.

By the way, actively enter the Russian market of government bonds foreign investors have begun back in November 2017, when the possible limitations just discussed. This month, the share of non-residents fell by half a percent, while the volume of investments — 1 billion virtually any. The Central Bank then became worried and began to work out a stressful scenario. As far As the regulator is successful in this, we will see very soon, according to analysts, the Central Bank should start buying Russian debt, and to intervene in trading in order to help the ruble. Activity the regulator should add the upcoming presidential election — the growth of social tension due to another collapse of the ruble, the authorities just do not need.

official channels

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