|
The Russian stock market has recently demonstrated good stability amid upheavals: in the last week, the RTS stock exchange gained more than 1,600 points. In a little over a month, the RTS regained half of what it had lost in May and June, while its growth in the last year – more than 45% – was among the best recorded anywhere in the world. Trading is fairly brisk, with daily returns of $50-$60 million.
The continuing decline of the dollar is forcing many Russian traders to sell the American currency. As a result, Russia's gold currency reserves rose to a new high of $266.9 billion, placing it third in the world, behind China and Japan. However, this position is likely to be short-lived, since repaying Russia's debt to the Paris Club of creditor nations will drain $22 billion from the reserve.
There is nothing strange about these successes: indicators are all lining up favorably for the Russian market. The war in the Middle East is driving oil prices even higher: prices quoted in the middle of last week for Brent oil hit a new all-time high of $78.61 per barrel, while Russian Urals climbed to $73. Though prices dropped 1.3% on Thursday in response to the foiling of a large-scale terrorist plot in Britain, a serious interruption of the upward trend in oil prices is unlikely.
As many in the market had predicted, the U.S. Federal Reserve froze interest rates at the previous level of 5.25%. Reactions on the global market were muted, though subsequent comments by the Fed concerning the "estimated effect of slowing economic growth on inflationary processes" caused many investors to anticipate further rate hikes. In Russia, these words struck a similar chord: in July an unexpected worsening of inflation drove consumer prices up by 0.7%. So far, this has not impacted the monetary policies of the Central Bank, although the growth of inflation may cause it to adjust its plans to lower refinancing rates before the end of the year.
Dmitriy Ladygin
| 
