EUR/RUB Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and near the lower end of its range.
Key drivers:
• Rate gap: The European Central Bank has maintained its benchmark rate, while the Bank of Russia’s recent monetary policies reflect a response to sanctions, creating a divergence in interest rates.
• Risk/commodities: Oil prices are at 90-day highs, significantly impacting Russia's export revenues, which can influence the ruble's value.
• International sanctions: New U.S. sanctions targeting Russian financial institutions have increased volatility in the ruble's exchange rate, adding downward pressure on its value.
Range:
EUR/RUB is expected to hold within its recent range, potentially testing the lower extremes if downward pressures persist.
What could change it:
• Upside risk: A resolution or easing of sanctions could improve the ruble's stability and increase its value.
• Downside risk: Further declines in oil prices or additional sanctions could exacerbate the ruble's depreciation.
