USD/RUB likely to rise towards 70.0 Mark over coming quarter, says Commerzbank
Source: FxWire Pro - Commentary / 07 Dec 2018 04:33:34 America/New_York
The USD/RUB currency pair is expected to rise towards the 70.00 mark over the coming quarter, with further likelihood of a 25 basis points hike from the Central Bank of Russia (CBR) at its December meeting, but this could be the last in this cycle, according to the latest research report from Commerzbank.
The OPEC+ group is still negotiating an agreement among members to cut oil production and support the oil price. The final details are yet to be agreed, but in case output is cut back, this will be negative for the Russian economy.
Russian growth had begun to perk up in Q3 after OPEC+ had agreed to increase output and Russia began to produce 200k bbl/day more (this, however, only partly made up for a 300k bbl/day production cut implemented since last year).
Unfortunately, the acceleration of growth during Q3 was offset by a setback in the agricultural sector and the economy lost its chance to get on a faster growth path. Now, the boost from that earlier agreement is set to be reversed.
Further, the price of oil is unlikely to rise back to the Q3 level regardless of such output cut – which means that both price and quantity will be lower over the coming quarter, which will depress the economy, the report added.
"Our 2018 growth forecast for Russia is a sub-consensus 1.5 percent vs. official forecasts in the 2 percent range. One potential positive from the lower oil price, though, is that inflation, which was beginning to approach the 4 percent target may begin to cool off (yesterday's November CPI data showed 3.8 percent headline and 3.4 percent core inflation)," Commerzbank further commented.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.