Macroeconomic Forecast Russia

We believe that the ongoing bull-run in the Russian rouble could soon run into some heavy resistance, as concerns over the state of the global economy mount and political uncertainty ahead of the March 4 presidential election will likely continue to see high private sector net capital outflows in the first quarter. Accordingly, we have lowered our exchange rate forecast for the Russian rouble for this year, now forecasting an average exchange rate of RUB31.69/US$ from RUB30.49/US$ previously. We have also changed our end-year target for the rouble to RUB31.20/US$ from RUB28.8/US$ previously. For the time being, elevated global oil prices should prevent an aggressive sell-off in the rouble.

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