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  Tuesday, December 1, 2020
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Tensions in the banking sector prevented the growth of the dollar rate in Russia
On Tuesday, the dollar rate on MICEX went down to 29.1218 rubles, i.e. 0.84 kopecks lower than the Monday figure. According to experts, banks' mutual distrust in view of the persisting tensions in the banking sector drastically restricted the fluctuation of the rate on Tuesday. Activity of currency market operators was extremely low - they concluded only few deals to the sum of $29.12 million, and ruble/dollar quotations froze at 29.12-29.13 rubles per dollar. According to Mikhail Selivanov, a dealer with Promsvyazbank, the market "tumbled" due to the fact that banks closed mutual limits in view of the negative events in the banking sector. "And they have not yet started selling the proceeds," added Mr. Selivanov. If any changes take place today, they will only be in favor of the dollar, the source believes. This is due to the growing offer of rubles freed by the Central Bank's reduction of the standard allocations to the fund of obligatory reservation. "Money from the fund returned and increased liquidity on the market," Mr. Selivanov continued adding that free (ruble) funds would be used for purchasing currency. According to dealers, the Central Bank did not participate in trading sessions on Tuesday because the level of market quotations was far lower than the bank's latest quotation for currency sales to banks - 29.16 rubles per dollar. Mikhail Selivanov forecast the fluctuation range of the dollar/ruble rate to remain within 29.10-29.16 rubles per dollar before the end of the week. He explained that the dynamics of the rate would depend on the amount of ruble cash on offer and sales of currency proceeds. The one that begins first will become a priority factor. Nonetheless, he added, the crisis of trust in the banking sector will be affecting the currency market for a long time to come. It will take 3-5 months to restore what was lost within a week," believes Mr. Selivanov.
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