Back
15 May 2015
Russian intervention - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman noted relevant market related conditions in Russia and the Ukraine.
Key Quotes:
"The Russian central bank bought USD for the first time since last June."
"Before, there was only verbal intervention from officials. Now, actual direct FX intervention signals discomfort with USD/RUB below 50."
"The central bank suggested that the purchases are meant to manage foreign reserves, rather than signaling a desired exchange rate or contradicting a free float. We believe both are playing a role in the decision to intervene."
"Ukraine default risk appears to be rising. Talks between the main creditor group and the Ukraine government have stalled, with both sides taking a less conciliatory tone in the media."
"The key area of disagreement is write-down on principal. Ukraine believes a combination of cuts to both interest and principal as well as maturity extensions are needed, while the creditors believe the principal amounts should be left intact. The IMF has said that a debt deal was “vital” before it completes its next review in mid-June."
Key Quotes:
"The Russian central bank bought USD for the first time since last June."
"Before, there was only verbal intervention from officials. Now, actual direct FX intervention signals discomfort with USD/RUB below 50."
"The central bank suggested that the purchases are meant to manage foreign reserves, rather than signaling a desired exchange rate or contradicting a free float. We believe both are playing a role in the decision to intervene."
"Ukraine default risk appears to be rising. Talks between the main creditor group and the Ukraine government have stalled, with both sides taking a less conciliatory tone in the media."
"The key area of disagreement is write-down on principal. Ukraine believes a combination of cuts to both interest and principal as well as maturity extensions are needed, while the creditors believe the principal amounts should be left intact. The IMF has said that a debt deal was “vital” before it completes its next review in mid-June."