MOSCOW: The Russian rouble strengthened against the U.S. dollar on Wednesday but analysts are warning that it will follow lower oil prices with Goldman Sachs predicting that the rouble will break through the 100 mark to the dollar in three months.
At 0950, GMT the rouble was up 1.4% to 82.40 against the dollar in a move that also reflected the global weakness of the U.S. currency. The dollar has weakened by 27% against the rouble since the start of the year.
The rouble is supported by optimism about easing tensions between Russia and the United States, high interest rates and the central bank’s forex interventions.
Goldman Sachs, however, issued a stark warning on April 15.
The bank said the rouble would depreciate to 100 against the dollar or 22% by mid-summer and will slide further to 107 to the dollar by the end of the year, aligning with the projected oil price at $62 per barrel, slightly below the current level.
“We model the impact of oil prices on the rouble by assuming that the rouble will depreciate sufficiently to reduce imports by a similar amount to the decline in exports, implying a current account that is close to unchanged from current levels,” the bank said.
Prices for oil, Russia’s main export commodity, plummeted after U.S. President Donald Trump hiked tariffs on imports, sparking global trade wars and raising concerns of a global economic slowdown and reduced demand for energy.
Against the Chinese yuan, which is used by Russia’s central bank for its foreign exchange interventions and is currently the most traded foreign currency in Russia, the rouble was down 0.7% at 11.30 on the Moscow Stock Exchange.
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