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FX.co ★ RUB in suspense ahead of decisions by US and Russia’s regulators

RUB in suspense ahead of decisions by US and Russia’s regulators

RUB in suspense ahead of decisions by US and Russia’s regulators

The Russian ruble paused for breath ahead of policy decisions by the US Federal Reserve and the Bank of Russia. In the meantime, analysts expect the ruble to edge down. However, the crucial decisions of the US and Russia’s central banks will determine a further dynamic of the Russian currency.

As it was priced in by markets, the US Fed raised interest rates for the second time in 2017 at the latest policy meeting in June. Besides, according to the consensus of analysts, the Bank of Russia is expected to lower the key interest rate by 0.25 basis points in mid-June. Either decision could make the Russian ruble lose ground. Sergey Serostanov, an analyst at Nefteprombank, says that the Russian finance ministry is going to expand forex interventions in an effort to depreciate the overvalued ruble. The other barometer of the ruble’s forex rate is the oil market. Being a commodity currency, the ruble is highly sensitive to oil prices. On the back of the ongoing slide in oil prices, the ruble is doomed to weaken.

Eventually, the Russians have become more financially literate. With a view to spending a summer vacation abroad, the smart citizens bought the foreign currency in advance, but not in the peak season. For example, the Russians were actively buying the euro in February, taking advantage of the euro’s weakness. Experts predict that the Russian ruble will fall back to 60 against the US dollar in the medium term.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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