My subscription
...
Filters
My Subscription All Publications

Slump in the Russian ruble has further to run

The Russian ruble looks set to lose further ground over the coming months as geopolitical tensions and the threat of international sanctions ratchet up. We expect the ruble to drift towards 80/$ by year end, before rebounding to 72/$ (previously 65/$) by the end of 2021.
Liam Peach Emerging Markets Economist
Continue reading

More from Emerging Europe

Emerging Europe Data Response

Israel GDP (Q2 2022)

The stronger-than-expected 6.8% q/q annualised expansion in Israel GDP in Q2 confirms that the Q1 contraction was just a blip. Economic activity remains strong and alongside the red-hot inflation figures for July, the risks are skewed to a 75bp rate hike at next week’s central bank meeting. We think a 50bp hike (to 1.75%) is just about more likely but we maintain our view that rates will reach 3.0% next year. Europe Drop-In (18th Aug.): Winter is coming to the European economy – but how harsh will it get? Join this special briefing on the economic impact of Russia’s gas supply threat. Register now.

16 August 2022

Emerging Europe Data Response

Russia GDP (Q2 2022)

Russian GDP contracted by 4% y/y in Q2, consistent with a fall of 6% in seasonally-adjusted q/q terms – a much better performance than analysts had expected and than had seemed likely a few months ago. There have been signs of stabilisation in many sectors over the past month or two but we don’t expect the downturn to bottom out until Q2 2023 and think the economy will stagnate at best thereafter.

12 August 2022

Emerging Europe Economics Weekly

Hungary’s fiscal tightening, currencies rebound

Hungary's government has reined in the budget deficit much more quickly than had looked likely since April's election, helping to alleviate the large twin deficits. But this presents a major headwind to the economy and supports our view that GDP growth will grind to a halt in the coming quarters. Elsewhere, CEE currencies have received some much-needed respite this month as global risk sentiment has improved. We think this will be short lived but it will at least take some pressure off central banks that are dealing with red hot inflation.

12 August 2022

More from Liam Peach

Emerging Europe Economics Update

BoI withdraws support, but no sign of tightening

Israel’s strong economic recovery prompted the central bank to phase out one of its emergency support programmes at today’s meeting and Governor Yaron’s comments suggest that the next step towards policy normalisation may involve the end of the bond purchase programme later this year. That said, interest rate hikes remain a distant prospect while inflation remains low.

5 July 2021

Emerging Europe Economics Update

Russian ruble may hold onto some of this year’s gains

The Russian ruble appreciated to a one-year high against the dollar recently but we think the rally will fade as oil prices fall back and US Treasury yields rise further. That said, the central bank’s determination to rein in inflation should keep Russian bond yields high and provide the ruble with more protection in this global environment. We now expect the ruble to end next year at 76/$ (previously 80/$).

In view of wider interest, we are sending this Emerging Europe Economics Update to clients of the FX Markets service as well.

2 July 2021

Emerging Europe Economics Update

Russia: a strong recovery in Q2, but risks ahead

Another strong batch of activity data for May suggest that Russia’s economy may have returned to just shy of its pre-pandemic level in Q2. The foundations are in place for the recovery to continue in Q3, but the latest virus wave and the possibility of a further tightening of containment measures pose a key threat.

1 July 2021
↑ Back to top