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The lack of transparency regarding the measures has made it challenging to anticipate the ruble's exchange rate or the Central Bank's potential response. This contradicts the Central Bank's previous approach, which focused solely on inflation, not the exchange rate.
The secrecy surrounding the identity of the 43 companies may be an effort to protect against potential Western sanctions. Additionally, keeping the list confidential hinders observers' ability to track significant export-import flows.
The ruble is expected to continue strengthening but remain just below the psychologically significant level of RUB100 against the dollar. This stronger ruble can also help combat inflation, with expectations of a decrease within six to eight weeks, aligning with the upcoming election. However, if the currency controls fail to achieve the desired outcomes, further actions in the currency market could be on the horizon.
The Bell anticipates the exchange rate will settle around RUB5-RUB10 lower than the RUB100 mark by the end of the year.
2.2 Israeli war unlikely to push up oil prices
Aggravations around Palestine usually have a small and short-lived effect on oil prices, but this time it may be different, writes Bloomberg. Brent oil stabilised at $87.5 per barrel after a five% jump on Monday, but uncertainty in the market remains. This is due to the Iranian factor in the context of a decrease in exports by Russia and Saudi Arabia.
The likelihood of Iran, which supports both Hamas and Hezbollah, entering the war is difficult to determine, but now appears to be low. In any case, neither the United States nor Israel yet have unconditional evidence of Iran’s involvement in preparing the Hamas attack, Politico writes, citing a representative of the Israeli Defence Forces.
A representative of Hamas itself told AP the same thing: the plan to attack Israel allegedly did not go beyond the group’s top leadership and was kept secret from its allies. This contradicts the WSJ, which cited Hamas sources as saying that IRGC representatives not only helped in the planning, but also gave the go-ahead for the operation.
If the conflict escalates, Iran may be forced to stop supplies of its own oil (currently about 1.6mn bpd). And the country itself is capable of blocking the Strait of Hormuz, thereby blocking the Persian Gulf and with it up to a third of world exports (and at the same time the supply of Qatari LNG). Of course, this is a truly “nuclear”, if not suicidal option for Iran, which will inevitably lead to a global energy crisis, so its practical probability is close to zero. But the very thought is enough to cause increased nervousness in the market.
In addition, Saudi Arabia may not ease production cuts as some expected as a result of the war, a Citi analysst told Bloomberg. Also, in his opinion, there is a possibility of “tougher” US sanctions against Iran.
10 RUSSIA Country Report November 2023 www.intellinews.com