Russia: FX Purchases Up In April, Largely Neutral For Ruble, But Other Risks Matter

Meanwhile, it does not mean that our constructive view on the ruble has no risks. The 1Q21 balance of payments, to be reported on Friday, will be a gauge of fundamental support to the rouble. We expect a current account surplus of US$20bn, down from the initial expectations of US$25bn on higher-than-expected import growth and lower-than-expected export volumes. Most importantly, the capital account remains the least predictable factor to watch, as in addition to portfolio outflows for OFZ, which have picked up from US$1bn in February to US$1.6bn in March, corporates and households have restarted the accumulation of foreign assets at a rate of US$4-8bn per month in the first two months of 1Q21, which is a more important constraint to the ruble's appreciation than the foreign policy themes that the market has been focused on recently.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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