The analysts working for Renaissance Capital perform some complicated calculations to find out what the Russian Ruble exchange rate is going to be depending on the future prices of crude oil. It is not a secret that the Russian economy is heavily dependent on its exports f crude oil. In particular, the exports of crude oil account for thirty percent to nearly half of the Russian GDP. With that said, oil prices seem to be the key factor influencing the Russian economy and national currency, Market Leader reports.
At the same time, Masterforex-V Academy reports that that on top of crude oil prices, the Russian economy and the Russian Ruble exchange rate is going to be dependent on some other factors, including how international rating agencies are going to rate the economy and, of course, the never-ending Western sanctions against Russia, supposedly for being an aggressor and fueling the civil war currently going on in the East of Ukraine.
In particular, they expect USD to cost 56,4 RUB on average this year if the average price of crude oil is 60 dollars per barrel. At the same time, as of January 20th, the Moscow exchange gave us 65 RUB per 1USD as the market exchange rate. At this point, the experts assume that the currency is undervalued and oversold.
Apart from the basic scenario, the experts gave us some extra scenarios of how much the Russian Ruble may cost depending on oil prices. In particular, they assume that if the average cost of a barrel of crude oil is 80 dollars, the Russian currency may strengthen a little bit up to 50 RUB per 1USd or even below. If oil costs $70/b, this is going to be somewhere around 53RUB per 1USD. However, if oil costs $40/b or $30/b, this is going to be somewhere around 72RUB or 87RUB per 1USD respectively.
At the same time, Goldman Sachs downgraded its prediction regarding the Russian Ruble value by upgrading the USDRUB exchange rate up to 69 and 58 for 2015 and 2016 respectively.
As for oil prices, they have been unstable since the start of the week. The WTI futures for March delivery went down to $47,24/b yesterday. This is confirmed by the chart below, courtesy of Masterforex-V Academy.
