USD/RUB: Capital controls and higher energy prices lift rouble – MUFG
|The rouble has continued to strengthen sharply against the US dollar resulting in USD/RUB falling to the lowest level since the middle of 2015. Capital controls and higher energy prices are set to continue propelling the RUB, economists at MUFG Bank report.
RUB has benefitted from record current account surpluses while outflows restricted
“The sharp strengthening of the rouble appears to be creating more concern amongst domestic policymakers. It has been reported that Russian officials are considering ways to dampen upward pressure on the rouble including a further loosening of rules on currency operations for companies active abroad and allowing more access to foreign exchange for households and businesses at home. Another method would be to set up a new budget rule to sterilize windfall budget revenues.”
“The CBR has now fully reversed the 10.5 point emergency rate hike delivered at the end of February when the Ukraine conflict first started. It reflects confidence from the CBR that the inflation outlook will improve significantly in the coming years supported by the sharp strengthening of the rouble.”
“The rouble will remain subject to upward pressure while capital controls remain in place to limit outflows, and Russia’s export revenues are boosted by higher energy prices.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.