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The start of 2020 has proven to be shaky for the RUB and volatility has increased amid coronavirus concerns. The currency that showed the best performance among EM throughout 2019 is now underperforming. Analysts at Nordea, however, forecast a probable recovery for the RUB.

Key quotes

“The RUB performance over the coming weeks will depend on the developments around the virus outbreak. We keep our view that when the market is more convinced that we are past the coronavirus peak, commodity currencies may slightly outperform the rest of EM FX.”

“More monetary easing signalled by the CBR (we now expect two additional rate cuts in 2020) and lower net FX purchases give additional argument in favour of our RUB-bullish forecast that started to look stretched amid the coronavirus outbreak.”