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RUB: More Rate Hikes, Action to Prevent a Further Slide in RUB Expected

RUB
CEEMEAEM BulletRussiaBulletEmerging Market News

Citing trading data, Kommersant report that the ruble plummeted to its lowest level against the US dollar and Chinese yuan since March 2022 amid a shortage of foreign currency due to US sanctions that have made it harder for exporters to repatriate revenue. USD/RUB rose as high as 114.50 and CNY/RUB reached 15.16 on Wednesday.

  • According to Kommersant, speculators also continue to bet against the ruble citing increased geopolitical risks. The CBR announced measures to support the currency yesterday, with “experts” cited by the newspaper also expecting further action from other government agencies.
  • Since the ruble's downward spiral will likely spur inflation, some analysts cited by local press think the CBR will have to hike its key rate to 23% in December, while it may be forced to raise rates further in 2025 compared to previous expectations of rate cuts next year.
  • Indeed, according to a CBR advisor cited by Interfax, a longer period of hawkish monetary policy will be required to restore price stability, with end-2024 inflation currently trending towards the upper bound of forecasts.
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Citing trading data, Kommersant report that the ruble plummeted to its lowest level against the US dollar and Chinese yuan since March 2022 amid a shortage of foreign currency due to US sanctions that have made it harder for exporters to repatriate revenue. USD/RUB rose as high as 114.50 and CNY/RUB reached 15.16 on Wednesday.

  • According to Kommersant, speculators also continue to bet against the ruble citing increased geopolitical risks. The CBR announced measures to support the currency yesterday, with “experts” cited by the newspaper also expecting further action from other government agencies.
  • Since the ruble's downward spiral will likely spur inflation, some analysts cited by local press think the CBR will have to hike its key rate to 23% in December, while it may be forced to raise rates further in 2025 compared to previous expectations of rate cuts next year.
  • Indeed, according to a CBR advisor cited by Interfax, a longer period of hawkish monetary policy will be required to restore price stability, with end-2024 inflation currently trending towards the upper bound of forecasts.