![]() ![]() While this means a spot appreciation, which is accompanied by a sizeable carry, the rouble is hardly tradable and uncertainty about the outlook is high,” she said.What’s Happening at the Sam Bankman-Fried TrialĬrypto Sector Seeks Lawyers, Compliance Officers After Reputational Hits “We reiterate our target of in three months and in 12 months. Looking ahead, the rouble remains under pressure, Ms Kennedy said. enticing more Russian individual and corporates to save in on higher yielding accounts instead of keeping balances in ," he said. curbing local consumption and imports of consumer goods and. "International investors therefore no longer take positions on and the reaction function of higher rates is limited to the effect of. The rouble trading reaction no longer follows the dynamics of a widely traded currency since sanctions on direct investments/capital flows and financial system limitations – Russian banks still don’t access SWIFT – have significantly limited the tradability of the currency, Mr Morelli said. In June, Andrei Belousov, Russia’s deputy prime minister, said the value of 80-90 roubles a dollar was best for the country’s budget, exporters and importers. The National picks out the most powerful images from the conflict. "So, Russia's current account surplus has been under pressure in 2023,” he said.įebruary 24 will be a year since Russia started the Ukraine war. Russian energy revenues have been considerably lower so far in 2023 versus the same period last year, added Mr Greenig. "However terms of trade worsened for Russia lately as exporting commodities prices softened in 2023." ![]() "Russia energy exports have generated hard currency inflows since the Ukrainian invasion and despite the seizure of international reserves, Russia kept generating current account surpluses that kept the currency strong," said Carlo Morelli, portfolio manager at investment company Azimut. The current account is projected by the central bank at around $50 billion in 2023, compared to $233 billion in 2022. This has led to a sharp fall in the country’s current account surplus. Russia’s value of exports has slumped since the G7 group of countries imposed a $60 price cap on Russian oil in December, while imports have surged.Ī cheap currency raises the rouble value of the government’s oil revenues, but it also increases the cost of imports. “Instead, we expect the to double down on capital controls and the rule that exporters must exchange their earnings from US dollars into roubles.” “Higher interest rates would hurt mostly consumers and local businesses, thereby undermining the backing of the population for the war further. “While the may hike another 100 to 200 basis points to address the slump, aggressive hiking as seen during the beginning of the war seems unlikely,” she said. However, economists had believed the central bank would raise rates only to 9 per cent by the end of this year, according to Ms Kennedy. “My view is that the Bank of Russia and the government will be prepared to tighten policy further if stability requires it.” So, the jumbo policy rate hike to 12 per cent makes sense and is a meaningful step,” Mr Greenig said. “Given the global geopolitical situation, Russia certainly wants to maintain a surplus position, and that would entail tighter policy. In a bid to stem the rouble's decline, Russia’s central bank raised interest rates to 12 per cent on Tuesday. It was gradually lowered to 7.5 per cent as inflation eased. The Bank of Russia previously announced an emergency rate increase in late February last year, right at the start of the war, raising the rate to 20 per cent. “The structural backdrop for this depreciation has been increases in the fiscal deficit and last year's big cuts in Russian interest rates,” said Douglas Greenig, chief executive and chief investment officer at asset manager Florin Court Capital. ![]()
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