Russian Ruble Surging to 2015 Highs
- New Europe Investor
- March 25, 2015
The Russian ruble is heading towards a year high, currently standing at 56 to the dollar.
It marks a huge improvement from the low of 69.65 it hit at the beginning of February.
The currency is still vastly down from 12 months ago, where it was trading at 35 to the dollar. It was trading as high as 33 to the dollar last summer.
Corporate Tax and Oil
Bloomberg reports the sharp increase has come from the $9 billion dollars the country expects to take in from corporate tax revenues due today. This estimate came from Russia’s largest bank Sberbank.
In addition, the fact that oil has stabilised at around $55 has added confidence in the world’s largest energy producer. Many believe that oil will not be going any lower, and the days of panic in the currency and the economy have disappeared.
The Moscow Times reports that household depositors are running to convert their foreign currency, that was bought in exchange for rubles in the heat of the crisis in December.
This marks a turnaround in optimism for the currency that is now spreading to all areas of the market. It is contributing to a return in appetite for Russian assets.
Moody’s and S&P have cut Russia’s investment grade to junk this year and as a result, JP Morgan Chase & Co will now exclude the country’s bonds from its indexes, reports Bloomberg.
At the time of writing, the ruble stood at 62.4 to the euro.