Page 57 - RusRPTDec18

Nabiullina's other comments allow to assume that at the very least purchases will be spread out until 2021, making the maximum addition to the regular purchase $1.4bn per month, on VTB's numbers.
This would be in line with the Ministry of Economic Development on November 28 saying that the ruble is expected to weaken gradually and economic growth to pick up after 2019. The rouble rate is forecasted to average RUB61.7 to US dollar in 2018, weaken to RUB63.9 in 2019, and to RUB75.2 in the long-term perspective through 2036. As of November 28 ruble traded at RUB67.27 to US dollar.
The Russian economy ministry, in a set of forecasts until 2036 released on November 27, said it expects the ruble to weaken gradually and economic growth to pick up after 2019. The ruble rate will average 61.7 against the dollar in 2018, 63.9 in 2019 and 75.2 in 2036, the ministry forecasts. The ruble traded at 67.27 against the dollar on Wednesday.
Russian Central Bank Governor Elvira Nabiullina announced in a press conference at VTB Capital Russia Calling forum that “if the current situation on the financial markets continues, we think it will be possible to resume the regular purchases of foreign currency after the New Year holidays, from the 15th of January”. Indeed, the statement about the potential resumption of the FX purchases added to the pressure on the RUB on Wednesday. In addition to the above, the European Union governments were discussing sanctions on Russia due to the latest aggressions. Also the Ukrainian President Petro Poroshenko added to the tensions by stating that Ukraine is at risk of full-scale war with Russia. In line with the increased tensions, the UAHlost in value. Furthermore, the dovish comments by Federal Reserve Chairman Jerome Powell could open a window of opportunity for emerging market currencies within the next six months.
The panic amongst Russian bank customers is over. In August they thought that the state was going to forcibly convert their dollar savings to rubles that lead to a run on accounts is almost over, as withdrawals of foreign currency fell in September, reports the Central Bank of Russia (CBR).
In September 2018, the population’s demand for foreign currency in cash decreased by 2% compared to August and amounted to $6.2bn, according to CBR data. That was 7% more than in September 2017, and 2% more than in September 2016.
The demand for dollars did not change compared to August and fell by 6% to the euro, reaching $4.37bn and $1.75bn, respectively: the population bought a total of $3.2bn and withdrew $3bn in dollar equivalent. In August, the population took about the same amount from banks.
The share of dollars in the structure of aggregate demand increased from 69 to 70%, the share of the euro decreased from 29 to 28%. Purchases by the population of foreign currency in banks decreased by 3% compared with August (dollars - by 2%, euro - by 6%) to $3.2bn. The average transaction amounted to $1,597.
The amount of foreign cash sold and credited to accounts in September decreased by 16% compared to August to $3.2bn. Compared to September 2017 and 2016, the currency supply from the population decreased by 8 and 15%.
57 RUSSIA Country Report December 2018 www.intellinews.com