We do not think the recent outperformance of Russia’s financial markets and currency will last. Indeed, the ruble has already dropped back slightly over the past week or so. There are three key reasons. First, ongoing conflict in Ukraine suggests that the crisis in the region is far from over. Second, despite signs that Russia’s economy is stabilising, we think growth will remain weak. And third, the rebound in equities has wiped out a large part of the losses earlier in the year, diminishing their appeal to the bargain hunters.
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