Page 21 - Russia OUTLOOK 2022

• FX
The ruble will be on a rollercoaster ride in 2021. As of December it was one of the best performing EM currencies having returned 5.8% over the first eleven months of the year. But the Russian currency sold off again in the last two months of the year due to revived geopolitical tensions.
The CBR December survey forecast for the USD/RUB exchange rate did not change significantly from previous estimates. On average over the year in 2021-2024, the exchange rate will be in the range of 72.1-73.5 rubles per dollar, the CBR said, although the ruble exchange rate remains extremely vulnerable to fluctuations in geopolitical tensions.
Fitch holds a slightly less bullish ruble view over the longer term, forecasting an average of RUB71.0/USD in 2022, compared to RUB69.00/USD it forecast earlier. The less bullish conviction is underpinned by expectations that the short-term tailwinds of higher oil prices and the end of the pandemic will wane over the course of 2022.
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