Russia has also faced issues of inflation and a weakened ruble in the recent past.

The Russian ruble has strengthened again, influenced by the weakening of the U.S. dollar. Additionally, a presidential decree in Russia has mandated that companies with essential exports must sell foreign currency income into rubles over a 6-month period to support the ruble's value and reduce potential inflation from increased imports. Investors predict that the Central Bank of Russia may raise interest rates to combat rising inflation.

In September, Russia's inflation rate increased by 6% year-on-year (YoY), reaching a new high since June. This inflation was particularly notable in food and gasoline prices. The higher-than-expected inflation is also contributing to expectations that the Russian central bank may continue to raise interest rates to control potential future inflation and stabilize the ruble.

Russia's current account has decreased to $16.6 billion in the third quarter, primarily due to the impact of Western sanctions and ongoing weakness in oil prices. Despite conflicts in the Middle East, oil prices have not risen significantly during this period. Moreover, the services surplus has increased by $9 billion due to a decrease in tourism.

Russia’s balance of trade decreased to $10.10 billion in August, down from $25.3 billion in the same month last year. However, compared to the previous month, exports have shown signs of recovery, while imports decreased slightly. The majority of Russian imports continue to be machinery and equipment used in production.

Russian exports have increased by 15.27% compared to the previous month, totaling $36.37 billion. Most of Russia's exports are still crude oil, and despite some challenges in the production capacity of refineries, these exports mainly go to China, a key trading partner.

The yield on Russian 10-year government bonds has decreased to 12.3%, down from a recent high of 13.08%. The primary impact continues to be due to increased inflation, which has caused a budget deficit of approximately 2.4 trillion rubles over the past eight months. In addition to increased exports, the uncertain growth of China and reduced energy purchases from India could have long-term implications.

Techical analysis data (5H)

Resistance: 97.8863, 98.2332, 98.4976

Support: 97.2750, 97.0106, 96.6637

Source: Investing.com

Pivot Points October 13, 2023 06:55 PM GMT+7