020 7898 050024 April 2014
RUB (Russian rouble) Current Rate:
RUB 59.87/£1; RUB 35.67/US$1
Russia has been pulling the strings in the Ukraine crisis, which continues to be under the harsh glare of the global spotlight this month. The seizing of government buildings in Eastern Ukraine by pro-Russian separatists and casualties at checkpoints have resulted in condemnation from the EU, US and UK. The volume on this growing chorus of disapproval has been turned up in the past month, with superpowers like the US threatening action – upgrading economic sanctions from Grade 2 to Grade 3 – if the situation does not abate.
Russia’s activity in the geopolitical sphere will have an almost direct influence on the country’s currency. Further economic sanctions will spell further slowdown in Russian economic growth, which will put pressure on the rouble. Although Russia prioritises keeping its unemployment level within a reasonable range, which has the effect of placating voting citizens, growth in real wages declined BY 3.1% in March compared to the year before, and the rate of industrial production dropped by 1.4% in the same period. The economic situation in Russia was already on a decline, and sanctions may worsen Russia’s fortunes.
Last month, we saw that the ‘soft’ approach taken by the EU, US and UK had been priced into currency markets, resulting in insignificant upset for the Russian rouble. This month, the stronger stance taken by the triumvirate will feature in the markets – this, added to the slowing Russian economy, will result in a depreciating rouble. Forecast rates calculated at the beginning of April suggest that the rouble may fall to 59.6140 against sterling; if the situation escalates, we may be seeing more exponential weakening of the rouble, particularly as sterling, riding a wave of UK economic growth, grows stronger.
Rate forecasts for GBP/RUB:
| Time Length | Rate |
| 1 month | 59.3284 |
| 3 months | 59.5650 |
| 6 months | 59.6140 |
Forecast accurate from 24 April 2014. Data taken from Reuters’ poll.
Data sourced from GBP/USD and USD/RUB cross.
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Disclaimer:
This information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy or sell. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.
