Page 52 - RusRPTFeb22

7.0 FX
RUSSIA -FX
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
Jan 22
Currency (units per EUR) (eop)
71.5
69.8
76.3
78.9
88.7
91.3
90.6
88.8
86.4
88.6
86.4
Currency (units per USD) (eop)
64.7
63.0
69.3
71.7
75.4
76.5
75.5
73.8
73.4
74.2
76.7
Currency (units per EUR) (average)
72.0
69.7
73.3
79.5
85.9
90.8
89.6
89.4
86.4
88.5
86.7
Currency (units per USD) (average)
64.7
62.9
66.5
73.8
73.6
76.2
74.3
74.2
73.0
73.8
76.6
source: CBR
The ruble has come under intense pressure in January as geopolitical tension ratchets up on the possible invasion of Ukraine by Russia. The currency has fallen from its recent peak of just over RUB70 to the dollar at the end of last October to close to RUB80 in the third week of January.
The biggest bank in the US JPMorgan has sold off its entire ruble holdings as the Russian national currency crashed, falling close to its all time low of RUB80 to the dollar, it was reported on January 24.
The currency, which is extremely sensitive to geopolitical tensions crashed in the last week after Russia issued an eight point list of demands and kicked off a string of meetings starting on January 10 with the west. Those talks have not gone well, with Nato members looking likely to reject Russia’s key demand of halting the expansion of the alliance to the east.
On January 24 the ruble slumped to RUB79.7, its lowest level since the oil price shock in 2014, leading the Central Bank of Russia (CBR) to halt sales of the national currency. The currency then clawed bank two rubles in value and opened at RUB78.6 on January 26.
The last time the ruble crashed in 2014 the CBR was forced to put in an emergence rate hike to 17%, a level it then took five years to unwind, taking rates down to 4.25% in July 2020, a post-Soviet low. The appearance of high inflation in 2021 has lead the regulator to start tightening again throughout 2021 with the rate currently at 8.5%.
JP Morgan manages $2.6bn worth of assets including trading the ruble, but has pulled out of the market due to the high volatility and uncertain outlook for
52 RUSSIA Country Report February 2022 www.intellinews.com