Russia: Upside pressures on the currency

In an effort to stabilize the ruble, Russia is looking to expand its Foreign-Exchange reserves (including Gold). Today, Russia will disclose this amount for the period ending 26 of May. Russia’s Central Bank has already made clear that one of its primary objectives is to increase those reserve holdings up to $500 billion as stated by Elvira Nabiullina, head of the central bank.

The reserves currently amount to $405 billion. By the way, Russian gold reserves could officially be above China gold reserves by year end. Regarding the state of the Russian economy, Nabiullina said the economy has been resilient regarding international sanctions. As a result she hinted that interest rates may go even lower. The key rate is standing at 9%.



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Data-wise, inflation is collapsing, the last release printed at 4%. We recall that it was at an astonishing 16+% two years ago and the consumer prices growth is now standing at 4%. The unemployment rate is also on its way down and is now reaching 5.2%. However, real disposable income should continue its decline in May after the strong decline in April of -7.6%. We reload our RUB short position against the dollar for some more time and we target 57 ruble for one dollar in the short-term.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.