Russian Rouble: July Report

22 July 2014

RUB (Russian rouble) Current Rate:
RUB 60.0246/£1; RUB 35.1444/US$1

The Russian economy looks set to worsen, due to continued capital outflow from the country as a result of potential economic sanctions. Already castigated by leaders of major economies due to geopolitical tensions with Ukraine, Russia’s handling of the recent MH17 crash may have further repercussions levied against it, which could hinder economic recovery and growth.

Although the International Monetary Fund and World Bank predict a short-term dip in fortunes for Russia, it is as yet unclear how it is going to navigate this newest development in political tensions and their effect on its economy. Already on a steady decline pre-crash, the Russian economy saw a mere 0.9% growth in the first quarter of 2014 – a stark contrast from the 2% recorded in the previous quarter. Any further sanctions are likely to make investors nervous, intensifying capital outflows and leaving the economy in the lurch.

As a result, we expect the Russian rouble to weaken against major currencies like sterling in the next half-year. However, it remains to be seen how Russia will respond to any potential renewal of sanctions (or fresh new sanctions), and how it will balance its political stance with the fate of its economy in world markets.

 

Rate forecasts for GBP/RUB:

Time Length	Rate
1 month	58.5650
3 months	60.1800
6 months	60.6600

 

Forecasts accurate from 22 July 2014. Data taken from Reuters’ poll.

Data sourced from GBP/RUB and USD/RUB cross.

 

 

For help and guidance on making international payments using Chinese renminbi,

call 020 7898 0500 or send us an email

 

Disclaimer:

The 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.