“In July, there was a general decrease in volatility, while spreads on the purchase and sale of foreign currency cash at the end of the month fell to the level of January-May 2024,” says the new edition of the Financial Market Risk Review.
In June, against the backdrop of a new round of sanctions against the Moscow Exchange, spreads rose sharply to 10 rubles and above. As Rossiyskaya Gazeta reported, at Rosselkhozbank one could buy a dollar for 100.1 rubles and sell it for 85.1 rubles. At Rosbank it would cost 96 and 70 rubles respectively. At Loko-Bank – 99 and 82 rubles, at DOM.RF Bank – 97.5 and 87.5 rubles per dollar.
Spreads became huge after banks lost market direction due to the cessation of trading in currencies of hostile countries, explained Sergei Suverov, investment strategist at Arikapital Management Company and associate professor at the Financial University under the Government of the Russian Federation. “In addition, banks naturally wanted to take advantage of the situation to make additional profits,” he noted.
The narrowing of the spread between the purchase and sale price of spot foreign currency serves as an indicator of a decline in supply and demand on the market, says Ruslan Dynda, an analyst at Alfa Capital Management Company. “Financial institutions apparently no longer find such a large flow of people who want to buy currency and therefore are gradually starting to fight for the client,” the expert said.
This is confirmed by data from the Bank of Russia. In July, individuals significantly reduced the volume of their net purchases compared to the previous month, purchasing a total of 39 billion rubles in foreign currency.
