23 Dec 2014
Policy measures bring some temporary relief for RUB – BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, notes that RUB has rebounded strongly since the rate-hike by CBR, supported by trade agreement with China and the RUB 1Trillion recapitalisation plan by the central bank.
Key Quotes
“The Russian rouble has rebounded strongly since the Russian authorities stepped-up support for the currency. As a result USD/RUB is currently trading around 15% below levels prior to the implementation of the aggressive rate hike after the close of the European trading session last Monday.”
“The rouble is also deriving support from comments over the weekend from Chinese ministers suggesting that China will provide help if needed and that they are confident that Russia can overcome its economic difficulties.”
“Commerce Minister Gao Hucheng reportedly stated that expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia.”
“Still it appears unlikely that the Russian economy and rouble are out of the woods yet with both remaining subject to downside risks ahead.”
“Former Russian Finance Minister Alexei Kudrin warned yesterday that Russia is entering a “full-blown economic crisis” which they will “feel in force” from next year. He expressed a similar view to recent forecasts from the CBR that real GDP could contract sharply by at least 4% in 2015 if crude oil prices remain at around USD60/barrel. He also warned that Russia “will have” its credit rating downgraded to junk, and due to the economic disruption it is likely that payment discipline will fall significantly resulting in a series of defaults of medium-sized and large companies.”
“The CBR announced yesterday that it has already injected RUB30 billion into Trust bank, the country’s 28th largest lender by assets, to prevent bankruptcy. It follows the announcement on Friday of a RUB1.0 trillion recapitalisation plan for the banking sector.”
Key Quotes
“The Russian rouble has rebounded strongly since the Russian authorities stepped-up support for the currency. As a result USD/RUB is currently trading around 15% below levels prior to the implementation of the aggressive rate hike after the close of the European trading session last Monday.”
“The rouble is also deriving support from comments over the weekend from Chinese ministers suggesting that China will provide help if needed and that they are confident that Russia can overcome its economic difficulties.”
“Commerce Minister Gao Hucheng reportedly stated that expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia.”
“Still it appears unlikely that the Russian economy and rouble are out of the woods yet with both remaining subject to downside risks ahead.”
“Former Russian Finance Minister Alexei Kudrin warned yesterday that Russia is entering a “full-blown economic crisis” which they will “feel in force” from next year. He expressed a similar view to recent forecasts from the CBR that real GDP could contract sharply by at least 4% in 2015 if crude oil prices remain at around USD60/barrel. He also warned that Russia “will have” its credit rating downgraded to junk, and due to the economic disruption it is likely that payment discipline will fall significantly resulting in a series of defaults of medium-sized and large companies.”
“The CBR announced yesterday that it has already injected RUB30 billion into Trust bank, the country’s 28th largest lender by assets, to prevent bankruptcy. It follows the announcement on Friday of a RUB1.0 trillion recapitalisation plan for the banking sector.”