Russian companies clamor for dollars to repay debts
6- 21.08.2015, 12:29
- 22,515
![Russian companies clamor for dollars to repay debts](https://i.c97.org/p/articles/2015/ai-165559-aux-head-20150820_waluta_rus_t.jpg)
Major foreign currency buyers in Russia are domestic investors, concerned over looming debt repayments coming in September.
Despite further weakening of the Russian currency, with the dollar to ruble exchange rate hitting August 20 a new six-month low of above 67 rubles on Moscow stock exchange, the demand for currency is boosted by the Russian companies, facing lump-sum foreign debt payments, the Kommersant reported.
Low supplies of foreign currency from exporters being in no rush to sell it have a negative impact on an already plummeting ruble, amid resumed slide in oil prices. On Friday, Brent crude oil slumped as low as $44.34 a barrel, its lowest point since March, 2009. Russia's Urals Blend crude oil has lost more than 2%, settling at $43.64 a barrel, the lowest level since the year start.
Major foreign currency buyers in Russia are domestic investors, concerned over looming debt repayments coming in September. According to the Central Bank of Russia, after the August lull, when Russian companies and banks had to spend $4.6 billion on foreign debt repayments, they will face a total of $16 billion in foreign debt payments due in September. In addition, the currency market is dominated by speculative sentiments, also driven by Russian banks and investment companies.
Further dynamics of the Russian currency will be determined primarily by external factors.
"The lack of prospects for the recovery of oil prices leaves no chances for the ruble to recoup the loss. Therefore, the exchange rate may fall to RUR 66-68 per dollar," said senior analyst at Nordea Bank Denis Davydov.
The market situation can deteriorate if individuals also start piling up the foreign currency.