The withdrawal from Syria will help Russian assets increase in value

The news of the withdrawal of Russian troops from Syria cheered the participants of the currency market. If 19:50 GMT on 14 March, the dollar was worth 70,8 rubles, then to 21:40 69,8 RUB.

The strengthening of the ruble chief economist at FG BCS Vladimir Tikhomirov connects with lower geopolitical risk. “Official withdrawal from Syria reduces the risks of confrontation of Russia with other countries”, adds the head of the dealing center of Metallinvestbank Sergey Romanchuk. This, in his opinion, caused rough reaction of participants of the currency market. However, it is safe to say that the decision to withdraw troops will continue to support the ruble, it is impossible, he adds. Tuesday, 15 March, 13:00 Moscow time the dollar rose to 84 kopecks to 70.8 rubles.

The decision to withdraw troops from Syria could support oil prices, said the chief expert of the center for economic forecasting Gazprombank Yegor Susin. “The direct impact on the oil market, this decision has not, however, it can greatly improve the geopolitical situation. Countries will be easier to negotiate and, perhaps, the OPEC members will be able to negotiate solutions that will change the situation on the oil market,” he explains.

Managing Director of Arbat Capital, Alexander Orlov on the contrary believes that the withdrawal of troops will negatively affect oil prices, because it nullifies the possibility of war with Turkey, which would be blocked by the Bosphorus. “Through the Strait daily supplied about 2 million barrels of Russian crude and 1 million barrels from CIS countries. Reduction of oil supplies by 3 million barrels, on average, would increase oil prices by 10-15 dollars,” the expert explains.

Analyst at Sberbank CIB Cole Axon my morning review writes that the withdrawal of troops from Syria is “undoubtedly positive news in the short term”. “The military operation abroad costs the country dearly. It’s also possible “warming” of relations with the US and the EU,” he writes, drawing attention to the fact that the consequences in the medium term will become clear, when it becomes clear the motivations and objectives of withdrawal. The decision to withdraw gives “a chance for friendship with the West,” says Orlov. This can ensure the inflow of capital into the country, he said.

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The easing of geopolitical tensions will be reflected in the price of Russian assets, says chief economist for Russia and CIS “Renaissance Capital” Oleg Kuzmin. “Russia’s presence in Syria and the subsequent conflict with Turkey has increased the risk premium on Russian assets. Now she could potentially fall,” he says. The fact that Russia announced the significant withdrawal of troops from Syria and to continue search of a diplomatic solution to the conflict is a sensible and pragmatic move, notes the analyst FG BCS mark Bradford. It will positively affect the attitude of investors towards Russian assets, he adds.

The withdrawal is announced initiative, but what will be the further development of events is not yet clear, says Tikhomirov: “Putin has pledged never again to send troops to Syria”.