The ruble became stable after steadily weakening.

Although the dollar has decreased in value, the Russian ruble has not shown a significant tendency to strengthen. Throughout the year, there remains a possibility of further depreciation due to declining exports and increasing imports, which negatively impact the ruble's value. The depreciation has led to a significant increase in the cost of imports, resulting in an unavoidable trade deficit.

In the past two quarters of this year, the Russian government has faced a trade deficit of 2.60 trillion rubles. In comparison to the previous year, the deficit has increased by 1.48 trillion rubles. The surge in oil prices during that time greatly contributed to the increase in oil exports.

Currently, Russia incurs substantial expenses to support its military presence in Ukraine and Crimea, which has adversely affected oil and gas exports. There has been a 19.5% increase in expenditures, amounting to 14.98 trillion rubles, while revenues have decreased by 11.7% to 12.38 trillion rubles.

According to the latest data from the Ministry of Finance, Russia's revenue from oil and gas has decreased by 47% compared to the previous year, amounting to 3.38 trillion rubles in the first two quarters of this year. This decline is attributed to the slowdown in energy demand and China's economy, which led to reduced imports from China. In order to prevent further depreciation of the ruble, the Ministry of Finance has had to sell foreign currency reserves worth 39.4 billion rubles.

Furthermore, analysts predict that the Central Bank of Russia (CBR) may raise interest rates by 50 basis points to 8% on Friday. The rapid depreciation of the ruble in recent years has put pressure on inflation, which could intensify due to labor shortages and increased consumer demand. The projected inflation rate is estimated to reach as high as 11%.

Despite these challenges, Russia's production numbers have shown consistent growth, leading to increased hiring. While the hiring may not be experiencing significant leaps due to other concerns, it still presents an opportunity for Russia's economy to rebound in the future.

Techical analysis data (5H)

Resistance: 91.1834, 91.3539, 91.5344

Support: 90.8324, 90.6519, 90.4814

Source: Investing.com

Pivot Points June July 19, 2023 03:56 PM GMT+7