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Felicia Tan
June 5 13:44

UBS: Ruble has a great future, but oil needs monitoring

In the medium and long term, ruble should continue to benefit from the global economic recovery supported by accommodative global monetary policy  
Hope feeds the Russian ruble and fans of this currency may want to remain committed to it for a while longer. This is the opinion of UBS analyst Tilmann Kolb, who weighed the risk/ruble reward ratio in a note for clients. Russia's currency suffered a lot when the Covid-19 spread across Europe in March and hit the U.S.. But as these countries began to reopen as the worst period of the pandemic seems to have passed, the ruble is rising, although it has still lost 12% since the beginning of the year.
One of the risks to the ruble's appreciation, he said, is a slower-than-expected recovery in the global economy, which is more important than Russia's domestic progress.
He notes that the spread of coronavirus in Russia has stabilized in the past few weeks, albeit at a high rate of growth per day, and quarantine measures are gradually weakening.
However, the further weakening of oil prices is another thing worth paying attention to when we talk about the projected ruble appreciation.
According to him, the second wave of coronavirus and increasing diplomatic tension between the U.S. and China may also put pressure on the Russian currency. But, looking ahead, Kolb is positive about the currency.