Russian Roubl Recovers After Crossing 100

 Russian Roubl Recovers After Crossing 100

Russian Rouble (RUB) Recovers After Crossing 100 Level Briefly

In a historic turn of events, the Russian Rouble (RUB) lost the 100 level against the US Dollar for a brief period of time. However, the RUB weakness was shortlived as it recovered quickly and now trades near 99.58.

According to economists, the RUB is facing multiple headwinds, such as an increase in currency outflows as well as a drop in the current account surplus. All of these factors are weighing heavily on the Russian Rouble and thus making it difficult for the currency to compete against USD & EUR.

If we look back, the Russian Rouble also crossed the 100 mark during August, which was followed by a 350 bps rate hike by the Bank of Russia. After the rate hike, the policy rate in Russia jumped to a record high of 12% & thus allowed the currency to recover.

RUB Supported By Central Bank

In addition, the Russian authorities also introduced FX controls to ensure that the RUB weakness doesn't continue and to allow it to go back to double-digit territory.

After losing the 100 mark briefly, the RUB has gained 0.2% value against the USD and trades near 99.58. Earlier, the RUB was trading near 100.255 against the USD, which was a multi-week low for the pair.

The Russian Rouble (RUB) has also gained ground against the EUR and was last seen near 104.29 with a 0.6% gain. Similarly, the RUB's value is 13.60 against the Japanese Yen, with a notable daily gain.

A look at history reveals that RUB experiences selling pressure at the start of every month. This is mainly driven by the fact that exporters from Russia have to convert RUB into other currencies.

According to one analyst, the 100 level for RUB is more of a psychological barrier rather than an actual resistance. They also added that the RUB will get more cheaper in the next few weeks and months given the macroeconomic conditions.

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