© Dmitry Polevoy
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To my mind, it could be so, because if we take a look at the seasonally adjusted indicators, then we can clearly see that there has been no significant acceleration not only in the level of GDP growth, but also in the level of key macroeconomic indicators over the recent months. I suppose it is a new reality. Most probably the economy is trying to bottom out, but still it is a little too cold to say that Russia has entered the recovery phase.
Analysts state that the Fed's expected interest rate increase would have a smaller impact on the Russian economy than on other emerging market economies. Do you share this point of view or not? Why?
It certainly depends on the scale of the hikes and on the timing. Thus, if we talk about the potential action from the Fed, we suppose that it will only have a marginal impact, because all the potential negative effects have already been priced in. Nevertheless, after the latest data on non-farm payrolls, the possibility of a rate hike from the Fed taking place as soon as June weakened significantly, if not faded at all.
Currently, the Ruble is trading at around 67 against the US Dollar. What factors could determine the performance of the currency in the near future and what are your forecasts for USD/RUB for the end of 2016?
The Ruble is still mostly driven by oil prices, not only in terms of the current account balance, but also in terms of the market sentiment. Again, if oil continues to go up, there will be an upside pressure on the Ruble. However, at the same time, we are just entering the period of less supportive seasonality on the current account side and there might be still some volatility in terms of capital outflows. Thus, we think that in the coming two to three months, the Ruble will be relatively stable, trading in the recent range of 65-67, while there might be a marginal strength later in the year; I assume that the price will continue to rise in the Q4 of this year. Still, if we do not have any significant changes in external conditions, we believe that the Ruble will remain not far from the current level, perhaps with gradual appreciation potential.