USD/RUB: High downside risks for the RUB – Nordea

The RUB is among the EM currencies that are hit hardest in the current sell-off. The worst risk sentiment since the global financial crisis is exacerbated for the RUB by the plunge in the oil price to a record low since 2003, analysts at Nordea brief. USD/RUB trades at 79.564.

Key quotes

“We roughly estimate that with an oil price in the range of USD 20-30/barrel, the RUB could fluctuate in the 75-84 range against the USD depending on risk sentiment in the market.”

“In an environment with an oil price of USD 30-40/barrel, we would expect to see the RUB between 69 and 77 versus the USD.”

“The downside risks to the RUB are nevertheless still high in the next 1-1.5 months given that the global financial markets are still far from sustainable stabilisation.” 

“On a 1-year horizon we still expect a gradual recovery of the currency that will then be searching for a new equilibrium level of round 65-70 for USD/RUB and around 75-80 for EUR/RUB.”