USD/RUB: Political instability in Belarus raises negative spill over risk for rouble – MUFG

Public unrest in Belarus continues to build over the result from the presidential elections on 9 August. This political instability in Belarus hit Russian rouble as the USD/RUB lifted to an intra-day high of 73.800 from the low of 72.800 at the end of last week, economists at MUFG Bank apprise.

Key quotes

“The Belarusian opposition has three key demands: i) President Lukashenka has to go, ii) all political prisoners must be released, and iii) new free and fair elections must be held.” 

“So far President Alexander Lukashenko has insisted he won’t step down and instead proposed changes to the constitution which he has raised repeatedly in the past without making any progress. He stated that ‘we need to adopt a new constitution’ which must be approved by a referendum and ‘according to the new constitution, hold, if you want, elections for parliament, president and local authorities’. The proposals are seen as unlikely to dampen public unrest.” 

“Market participants are now watching closely to see how Russia reacts to political instability in Belarus which is increasing the geopolitical risk premium priced into the rouble. The fear of Russian ‘military’ intervention like in the Ukraine and imposition of further sanctions on Russia poses downside risks for the rouble. However, it is seen as less likely given the protestors are not anti-Russia and do not seek looser ties in the future. Instead, regional experts have pointed to Russia’s policy towards Armenia since 2018 where President Putin now appears content with Armenia’s popular democratic Prime Minister Nikol Pashinyan. If a similar playbook is followed with Belarus then downside risks for the rouble should prove more limited.”


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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD battles with 1.1700 as the market mood turns sour

Poor German data and renewed concerns about a default of the Chinese Evergrande property giant undermined investors’ sentiment, pushing them into the dollar’s safety.


GBP/USD accelerates its slump, trades around 1.3650

GBP/USD is under strong selling pressure, trimming most of its post-BOE gains. Concerns about the global financial health and slow moves towards tapering weigh on markets.


XAU/USD hangs near multi-week lows, around $1,745 ahead of Powell

Gold struggled to capitalize on its attempted intraday recovery move. Hawkish Fed/BoE, rising bond yields acted as a headwind for the metal. Resurgent USD demand exerted additional pressure on the commodity.

Gold News

PBoC imposes ban on crypto trading as it fosters ‘illegal financial activity’

PBoC bans crypto trading activities and a plethora of associated services, labeling it “illegal.” Overseas cryptocurrency exchanges providing services to Chinese residents will be investigated in accordance with the law. 

Read more

Evergrande, VIX and yields make for choppy day ahead

Equity markets remain focused on Evergrande as rumours of a possible default on overseas debt swirl. The market appears to be on the hunt for negative news, which leads us to conclude that stocks are going lower in the short term.

Read more