Ekaterina Kosareva added that not only oil prices but also the key rate decision of the Central Bank of Russia may affect the ruble exchange rate in the short term.
The ruble exchange rate is about to face another decline due to the drop in oil prices. Ekaterina Kosareva, the managing partner of the WMT Consult analytical agency, shared this opinion in an interview with wek.ru.
“At the moment, prospects for the ruble exchange rate are not bright,” Kosareva said. “Unfortunately, oil prices have fallen significantly over recently amid the coronavirus infection outbreak and the dwindling demand for oil. The ruble exchange rate is highly dependent on this macroeconomic indicator.”
She added that not only oil prices but also the key rate decision of the Central Bank of Russia may affect the ruble exchange rate in the short term.
“As for the expectations on the key rate, if the Central Bank decides to lower it by 0.5 percentage points from 6 to 5.5 per cent per year, it will also likely to lead to a further declining of the ruble,” said Kosareva. “Chances are the reduction of the rate has been already budgeted. Therefore, it is possible that the ruble will not react to the rate reduction at all. If the Central Bank keeps the rate, the ruble may rally slightly. However, it depends on the situation on the oil markets: if oil prices go down, there will be no strengthening.”