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RUB Gains, Despite Near Certain Default and Soaring Inflation

RUSSIA
  • USD/RUB BGN opens -0.73% lower this morning, holding just below the 82.00 mark with the 31 March low seen at 81.05.
  • The cross drifted lower yesterday, broadly ignoring further Western sanctions on coal, banks, Oligarchs & Putin’s daughters – but most notably failed to deliver an embargo on oil/gas.
  • Russia’s 5Y CDS also now implies a 99% chance of default after the 30-day notice period was triggered yesterday.
  • Weekly inflation figures continued to show the scope of the economic crisis facing Russia with YTD inflation up 9.99% and tomorrow’s March headline figure expected to reach 16.90% y/y with core at 17.30%.
  • Today’s focus will be on EU deliberations over the oil/gas embargo, and the market’s interpretation of the FOMC minutes.
  • Ceasefire talks are mostly stalled at the moment with little talk of renewed dialogue following the discovery of war crimes in Bucha.
  • As noted over the past few days, Russia is currently resupplying in Belarus for a targeted assault on the separatist republics in the coming days to bolster Putin’s territorial bargaining position before coming to the negotiating table.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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