FX market remains stable

Financial markets remained fairly stable in July. Interbank lending rates were close to the Bank of Russia key rate, the ruble depreciated slightly, largely due to temporary factors, and foreign investors increased investments in Russian securities, notes the 17th issue of the Banking Sector Liquidity and Financial Markets commentary.

The ruble weakened because non-residents converted their dividends from Russian companies and exporters sold little currency. However, in spite of expanded external sanctions, foreign investors increased their investments in Russian shares and bonds.

Market participants revised their expectations of future interest rates and inflation slightly upwards as the latter increased in June, the ruble depreciated and foreign sanctions were tightened.