Macroeconomic Forecast Russia

The bounce in the price of oil concomitant with the global market bull run from March to mid-June has provided a boost to the Russian rouble, with the unit gaining close to 10% in the period against the dollar-euro basket the Central Bank of Russia manages it against. In turn, this has resulted in a reversal in the short-term negative trend for foreign exchange reserves, with gross reserves rising 6.7% from a low of US$383.9bn at end-March to US$409.5bn on June 5. While we maintain that downside pressures on reserves will resume in H209, we now believe that the extent of reserve expenditure will be less than originally forecast. As a result, we have revised our expectations for end-2009 reserves to US$327.8bn (from US$262.9bn).

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