The Russian ruble’s recent rally driven by elevated oil revenues is likely temporary and will fade before year-end, according to Commerzbank analyst Tatha Ghose. Russia’s central bank has notably changed its EUR/RUB pricing methodology to derive rates from USD/RUB amid increasingly thin hard-currency trading volumes. The ruble has gained support in recent months as Urals crude prices averaged approximately $90 per barrel during April and May, boosting export revenues.
However, Commerzbank warns this oil-driven strength is unsustainable heading into the final months of 2024. The shift in currency pricing mechanics signals underlying liquidity challenges in Russian forex markets as Western sanctions continue to constrain international trading activity. Traders should note that despite current firmness, structural pressures on Russia’s currency market remain intense.
FXnCO Insight
Traders holding ruble positions should prepare exit strategies ahead of year-end, as oil price volatility and deteriorating forex market liquidity threaten to reverse recent gains rapidly.
Source: FXStreet