Weekly Forex Review (02/20/2023-02/24/2023)
Last week, the tenge weakened due to the end of the tax week. The decision to maintain the base rate helped the exchange rate to strengthen slightly and prevent its weakening. The external background at the same time was very ambiguous.
The Dollar Index rose sharply to 105.2 points on Friday. The reason was the expectation of the US Federal Reserve’s key rate increase. Statistics show an increase in consumer spending and inflation. At the same time, the President of the Federal Reserve Bank of Cleveland states that high inflation points to the need for a further key rate increase.
Hawkish statements by the President of the Federal Reserve also influenced the decline in oil prices to $ 80 per barrel. However, the market is optimistic about the dynamics of demand recovery in China after the cancellation of lockdowns and expects a reduction in Russian exports, which allowed oil prices to rise at the end of the week.
The ruble continues to weaken. The main factor was the introduction of the 10th package of sanctions against Russia. An additional factor is still a significant budget deficit.
In general, the exchange rate adjusted last week after the influence of short-term factors. We do not expect any significant internal events that could strongly affect the dynamics of the exchange rate. Therefore, this week we expect a further correction of the exchange rate to come to the values of the pre-tax week.
Read more in the paper
Sign Up for the Most Helpful Mailing List