Russian RUB hit 10-week high, with demand for bonds up

RUSSIA / FSU POLITICS - In Brief 25 May 2020 by Alex Teddy
On May 21 RUB reached its highest level in 10 weeks. The RUB touched 70 to the USD. This is 12% higher than the doldrums of March.The feel good factor is returning. People are willing to take a few risks again. Oil prices have risen a little. EU countries are relaxing lockdown. Demand for oil is due to increase.On May 20 the Finance Ministry sold USD 2.4 billion worth of government bonds. There was a lot of demand from both foreign and Russian investors. Russia is now regarded as a safe bet for investors. Considering the oil price fall and the world economic crisis the impact on Russia has not been as a severe as some feared.The Russian media is reporting that the state will speed up drawdowns from the National Welfare Fund (NWF). However, this is still a rumor. The state is loathe to dip into the NWF because it could cause higher sales of foreign currencies and stronger purchases of RUB.The RUB is likely to wobble in the coming week as more data from Q1 and the impact of the lockdown around the world filters through.

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