10.03.2016, 00:31
Sberbank CIB Talks about Economic Tendencies of 2015
OREANDA-NEWS. Sberbank CIB held a press briefing for Vladimir Pantyushin, Chief Strategist, Sberbank Investment Research. The event focused on several pertinent topics, including: the rouble's sensitivity to oil price fluctuations, inflation and its impact on the consumer sector, the Russian Central Bank's interest rate policy, and other issues.
The speaker began his presentation with an analysis of the relationship between the rouble exchange rate and oil quotes. In his opinion, since mid-2014 correlation between the two has strengthened and may exceed 90% during the current period of sharp oil price fluctuations. Oil quotes have become one of the key leading global indicators, but according to Mr Pantyushin the normal level of correlation with the Russian currency should be lower - no more than 30-40%.
Among the positive tendencies in the economy, he highlighted the fact that fears regarding payment of foreign debt and the impossibility of refinancing, which were at the forefront in late 2014 and early 2015, have faded significantly. This is happening because it has been possible to restructure or fully finance external payments using current revenue and this balance has neutralised the problem of servicing debts. In addition, the volume of external debt has fallen considerably compared to the mid-2014 highs.
Sberbank Investment Research's Chief Strategist noted that in late 2014 and early 2015 the rouble weakened significantly and inflation accelerated. When this situation peaked half of inflation was a result of the foreign currency factor. The inflation trend impacted the consumer sector, where the weakened rouble took its toll on prices of consumer goods, and was also the key reason for the growing cost of financing. However, since last November we have experienced slowing inflation and predict that it will fall to around 8.5-9% by the end of 2016.
Mr Pantyushin emphasised the direct link between inflation and the Central Bank's interest rate policy: "Currently the gap between the key rate and inflation is rather large and the Central Bank's policy is sufficiently conservative. In connection with this it's possible to predict that the key rate reduction cycle will take place in two stages totalling 1%. This will be positive for the economy."
He commented that on the whole, given the continuing macroeconomic uncertainty it is more practical to apply a scenario-based approach to forecasting. The speaker named the key aspects that will play a determining role in the economy short-term: "These factors include oil price dynamics, the volatility of the Chinese national currency and stock market, the Fed's rate hike, and improvement of the geopolitical backdrop."
The speaker began his presentation with an analysis of the relationship between the rouble exchange rate and oil quotes. In his opinion, since mid-2014 correlation between the two has strengthened and may exceed 90% during the current period of sharp oil price fluctuations. Oil quotes have become one of the key leading global indicators, but according to Mr Pantyushin the normal level of correlation with the Russian currency should be lower - no more than 30-40%.
Among the positive tendencies in the economy, he highlighted the fact that fears regarding payment of foreign debt and the impossibility of refinancing, which were at the forefront in late 2014 and early 2015, have faded significantly. This is happening because it has been possible to restructure or fully finance external payments using current revenue and this balance has neutralised the problem of servicing debts. In addition, the volume of external debt has fallen considerably compared to the mid-2014 highs.
Sberbank Investment Research's Chief Strategist noted that in late 2014 and early 2015 the rouble weakened significantly and inflation accelerated. When this situation peaked half of inflation was a result of the foreign currency factor. The inflation trend impacted the consumer sector, where the weakened rouble took its toll on prices of consumer goods, and was also the key reason for the growing cost of financing. However, since last November we have experienced slowing inflation and predict that it will fall to around 8.5-9% by the end of 2016.
Mr Pantyushin emphasised the direct link between inflation and the Central Bank's interest rate policy: "Currently the gap between the key rate and inflation is rather large and the Central Bank's policy is sufficiently conservative. In connection with this it's possible to predict that the key rate reduction cycle will take place in two stages totalling 1%. This will be positive for the economy."
He commented that on the whole, given the continuing macroeconomic uncertainty it is more practical to apply a scenario-based approach to forecasting. The speaker named the key aspects that will play a determining role in the economy short-term: "These factors include oil price dynamics, the volatility of the Chinese national currency and stock market, the Fed's rate hike, and improvement of the geopolitical backdrop."
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