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USD/RUB BGN drifts Below 120 as Both Sides Highlight Improved Ceasefire Dialogue

  • USD/RUB BGN trades +0.97% higher this morning, with the cross having fallen -8.30% in yesterday’s session to close around 118.33, despite the sharp downturn in oil markets (Brent -9.7% since Friday’s close).
  • Progress in ceasefire talks over the weekend was the most likely driver of RUB gains, with Zelensky’s aides pointing to a potential agreement by May at the latest.
  • The cross now stands a fraction below 120.00, with yesterday’s lows set at 117.243. Slow progress in making ground on Kyiv continues to create global supply-chain issues, with stagflation concerns keeping risk sentiment on the backfoot.
  • Analysts broadly expect the CBR to keep rates on hold at 20% as the bank awaits clearer data on the impact of sanctions, which will be felt over time as shortages and payment issues weigh on activity and drive inflation higher.
  • Today’s focus is on continued progress in ceasefire talks and potential for an eventual Zelensky-Putin meeting, although this remains some way off until terms of such a meeting can be agreed. China’s denial of Russian calls for help is encouraging as a broadening of the conflict would be a major concern.
  • China has seemed reticent to provide meaningful help that would put itself under more sanctions pressure, and will likely keep its stance well balanced.
  • The more protracted siege on Kyiv does, however, increase the risks of chemical warfare – should Putin see no other means of breaking the city’s resolve.
  • Meanwhile, bombing of key cities continues and Ukrainians in Odesa say they are preparing for a potential sea landing in the coming days.
MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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