MOSCOW, March 6 The rouble's appeal for carry
trade is probably overstated, analysts at Russia's central bank
said on Monday.
The appeal of carry trade transactions with the rouble,
where players borrow currencies such as dollars cheaply and
invest them into high-yielding rouble instruments, is limited by
currency risks, the analysts said.
The comments follow a series of official statements
indicating that Russian authorities see limited room for the
rouble's further strengthening.
In a monthly research note, the central bank's analysts said
the rouble's strengthening this year was mostly caused by supply
of foreign currency from export-focused companies.
Seasonality also played into the rouble's hands: the rouble
firmed against the dollar in the first quarter 10 times in the
past 15 years.
The central bank said the market's reaction to the finance
ministry's decision to start buying foreign currency was
limited. The bank said its moderately tight monetary policy had
not only lowered economic uncertainties but also helped to
contain inflationary risks from the state forex purchases.
"Thus the current balance of inflationary risks speak for a
very smooth easing of monetary policy, which should remain
moderately tight," the research note said.
The central bank analysts also increased the average oil
price seen in the second quarter to $50 per barrel from a
previously expected level of $40, adding that a recovery in
consumer and investment demand had already exceeded initial
(Reporting by Andrey Ostroukh; Editing by Alexander Winning)