The observed exchange rates of the Ruble against the US Dollar (USD) and Euro (EUR) are entirely artificial and detached from fundamentals since the US sanctioning of the Moscow Exchange, which ended trading in these currencies. We retain our forecast that the underlying value of the Ruble against hard currencies such as the Euro or the USD will decline over the longer term as Russia's current account surplus will narrow down progressively, Commerzbank’s FX analyst Tatha Ghose notes.
Technical USD/RUB fix to keep rising
“Even before the US sanctioning of the Moscow exchange (MOEX) and the EU announcing its 14th sanctions package on Russia, USD/RUB and EUR/RUB exchange rates had mainly been ‘technical fixes’ as Russia’s own central bank (CBR) is blocked from transacting in dollars or euros. Now, after USD can no longer be traded on MOEX either, the USD/RUB exchange rate has become even more ‘theoretical’.”
“The published rates are indirectly deduced from OTC and other market sources by CBR – for example, using the cross rate between rouble and CNY. We view such exchange rate quotes as unreliable, and their day-to-day movements probably fictitious. USD/RUB and EUR/RUB exchange rates are set to clear the market for a narrow group of traded items, mainly energy and commodities, for which some counterparties are still free to transact in hard currencies.”
“In the longer-term, we forecast USD/RUB and EUR/RUB to drift up gradually because we expect Russia’s current-account surplus to narrow down. The current-account is only a counterpart to the (shut) capital-account – when one is shut, the other is likely to progressively shut down also, which means that the technical USD/RUB fix will keep rising.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD slides toward 1.1100 as USD recovery continues
EUR/USD stays under bearish pressure and declines toward 1.1100 on Wednesday. The cautious market mood, as reflected by the mixed action seen in Wall Street, supports the US Dollar and forces the pair to stay on the back foot.
GBP/USD drops below 1.3200 on renewed USD strength
GBP/USD struggles to hold its ground and trades below 1.3200 on Wednesday, undermined by a broad US Dollar rebound. Markets turn anxious ahead of speeches from the BoE and the Fed policymakers later in the day.
Gold struggles to retain the $2,500 mark
After falling toward $2,490 earlier in the day, Gold staged a rebound and trades above $2,500. Renewed US Dollar strength and US Treasury bond yields' resilience, however, caps XAU/USD's upside.
Nvidia Q2 Earnings Preview: All eyes on NVDA after close Premium
The moment is almost here. Despite a number of showstopping earnings calls this season, everyone has been waiting for Nvidia (NVDA) to release fiscal 2025 Q2 results, which finally arrive after the closing bell on Wednesday.
Three fundamentals for the week: Focus on the fragility of the US economy Premium
US Consumer confidence data will provide a gauge of how consumers are feeling. Jobless claims are in focus after Fed Chair Powell's dovish speech. Investors will look to the core PCE index to confirm that inflation is falling.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.