3 Apr 2015
Cautious approach to the RUB – Rabobank
FXStreet (Edinburgh) - Strategist at Rabobank Piotr Matys remarked the cautious tone around the Russian currency.
Key Quotes
“Based on an average oil price of USD 60 per barrel, the economy is expected to contract 2.5% y-o-y this year. Previously the recession was estimated at 3.0% y-o-y”.
“Admittedly, there are signs of stabilisation in the financial market, which allowed the Bank of Russia to start unwinding the accumulative tightening of 11.5% implemented throughout last year”.
“From a long-term perspective, Russia’s fundamentals should strengthen as the crisis fuelled determination amongst officials to reduce reliance on external demand for oil and gas”.
“As long as the ruble is relatively stable, the CBR will continue to lower borrowing costs at each meeting with the next one scheduled on April 30. That said, renewed RUB depreciation would limit room for manoeuvre”.
“We maintain a cautious view on the ruble despite its impressive performance so far this year. With NATO accusing Russia of providing the separatists with heavy weapons, the fragile ceasefire in eastern Ukraine might not prove sustainable”.
“Given that Brent crude prices declined in March after the February surge, RUB’s impressive rally starts to look stretched and vulnerable to a correction”.
Key Quotes
“Based on an average oil price of USD 60 per barrel, the economy is expected to contract 2.5% y-o-y this year. Previously the recession was estimated at 3.0% y-o-y”.
“Admittedly, there are signs of stabilisation in the financial market, which allowed the Bank of Russia to start unwinding the accumulative tightening of 11.5% implemented throughout last year”.
“From a long-term perspective, Russia’s fundamentals should strengthen as the crisis fuelled determination amongst officials to reduce reliance on external demand for oil and gas”.
“As long as the ruble is relatively stable, the CBR will continue to lower borrowing costs at each meeting with the next one scheduled on April 30. That said, renewed RUB depreciation would limit room for manoeuvre”.
“We maintain a cautious view on the ruble despite its impressive performance so far this year. With NATO accusing Russia of providing the separatists with heavy weapons, the fragile ceasefire in eastern Ukraine might not prove sustainable”.
“Given that Brent crude prices declined in March after the February surge, RUB’s impressive rally starts to look stretched and vulnerable to a correction”.