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The rouble has been hit hard by the twin negative shocks from COVID-19 and the oil price collapse weakening sharply during March against the US dollar from 67.153 to 77.970, per MUFG Bank.

Key quotes

“The sharply weaker rouble has limited the room available for the CBR to loosen policy to support growth. Governor Nabiullina has even hinted that rate hikes may be required to combat upside risks from inflation which are set to spike higher.”

“An emergency fund totalling about USD3.7 billion has been set up to help companies and people affected by the disruption.”

“Russia has now moved towards a full lockdown which will result in an even deeper recession.  In these circumstances, the rouble remains vulnerable in the near-term but should rebound further out.”