RUB falls due to row with the US

RUSSIA / FSU POLITICS - In Brief 23 Mar 2021 by Alex Teddy
On March 23 the RUB fell 2%. At one point it touched 73.6 to the USD. It fell to 90.6 to the EUR but then climbed. There has been 5% fall in 7 days. Biden's statement that Putin is a killer has spooked the markets. There is a risk of even more US sanctions.Oil prices are down slightly over the past couple of weeks but they are now roughly where they were before coronavirus struck.The RUB is at its lowest to the USD since early February 1 2021. It is 20% lower than where it was in February 2020. However, the fundamentals of the Russian economy are sound.Putin's spokesman said on March 22 that Russia might even be blocked by Swift.Sberbank and Sova Capital said that the RUB's geopolitical risk premium is 10%. That is to say that if there were no chance of sanctions the RUB would be at 70 to the USD.Experts do not anticipate more US sanctions in the short term. The rumor about a ban on trading Russian Government bonds is unlikely to be true. BNP Paribas said the chance of severe sanctions 15%.

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