Dollar, Euro Continue To Go Up In Belarus?

It's a good time to buy currency, which may go up in price in the near future.

The dollar ended the last week with the quotation of USD/BYN 2.6356, having added +2.90% for a week and +3.43% to the beginning of the year, writes myfin.by.

The euro has added +3.83% in the same period, narrowing the gap to the beginning of the year by -6.87%. The closing rate of the week was EUR/BYN 2.6845.

Russian rouble has surpassed our expectations and has fallen in price by -3.72% over the week, reducing to +25.46% compared to the beginning of the year (although relatively recently the increase to the beginning of the year exceeded 40%). As a result of the Friday trading, the exchange rate of the currency pair RUB/BYN closed at RUB/BYN 4.3060 per 100 Russian roubles.

In order to understand fully the prospects of the domestic currency market for the next month or two, we would like to draw your attention to one important factor - a significant increase in the volume of currency trading in the Chinese Yuan on the Moscow Currency Exchange.

In general, with the end of the tax period in the Russian budget, by the end of last week the interest in the USD had increased. In no small part this demand was fuelled by an increase in import purchases, which began to recover as new supply chains and suppliers started to form. In general, this is justified - sanctions are sanctions, but business does not stand still and new import channels are gradually being created. The autumn and growth in consumer demand are just around the corner.

Furthermore, the Russian currency market is absorbing the oversupply of the US currency which has hit the market in the first half of this year through an increase in Chinese yuan trade volume and cross transactions between the yuan and the US dollar.

Hence, the Chinese yuan rate in the Russian market becomes a leading indicator for the Belarusian foreign exchange market and, consequently, the yuan growth will provoke a weakening of the Belarusian ruble against the U.S. dollar and a strengthening against the Russian ruble.

It is quite expected that with the beginning of the current week the trend for the USD/BYN pair will continue, probably to the level of USD/BYN 2.6500-2.6700.

The euro might show a more intensive rise, but here the intrigue with the growth of the euro on the Forex interbank market will interfere. If the euro breaks through the EUR/USD 1.3000, we can expect an increase of the EUR/BYN above 2.7000.

With the Russian ruble drifting towards USD/RUB 65.00 in Moscow trading, it might roll back to RUB/BYN 4.2500-4.2000 on the Belarusian currency market.