Rouble to weaker further – MUFG

The Rouble has resumed the weakening trend against the US Dollar that has been in place since late last year following a brief period of consolidation in May. Economists at MUFG Bank analyze USD/RUB outlook.

Oil to rebound in H2

For this year as a whole the surplus is expected to shrink in half from last year’s total of just over 10% of GDP reflecting: i) lower energy prices, ii) the EU’s Oil embargo, iii) the G7 oil price cap and recovering import demand. Russia remains heavily reliant on oil export revenues to help finance the cost of its invasion of Ukraine. 

The ongoing decline in the price of Oil especially with Russian Oil continuing to trade at a discount is making life more challenging. Our commodity analyst does though expect the price of Oil to rebound in H2 in response to tightening demand and supply conditions. 

The Rouble sell-off in June has also coincided with greater concern over political and social stability in Russia. The uprising by the Wagner mercenary group has cast doubt on President Putin's grip on power amidst the negative fallout from the ongoing conflict in Ukraine. 

USD/RUB – Q3 2023 91.87 Q4 2023 94.88 Q1 2024 92.58 Q2 2024 92.82

EUR/RUB – Q3 2023 101.10 Q4 2023 106.30 Q1 2024 104.60 Q2 2024 102.10