Sure, the RBA froze interest rates on Tuesday, but there's plenty of pain to come 
Governments have been able to overrule the Reserve Bank for 80 years. Why stop now? 
Will the RBA raise rates again? Unless prices surge over summer, it's looking less likely 
Inflation: raising interest rates was never the right medicine 
At year-end Russian consumer prices provided a positive surprise. Last Friday the office of statistics announced that inflation in December had fallen to 5.4%. The previous month the rate of inflation had stood at 5.8%.
The central bank has given an inflation target of 4% for late 2017 and many analysts had initially not taken it seriously for that. However, most recently the central bank was very hesitant it its rate cuts and turned out to be correct in the end.
Even though the majority of analysts still do not expect inflation to actually ease to 4%, the recent data still makes that seem much more likely. A fall in inflation then also creates scope for the central bank to reduce interest rates further.
The problem is that the ruble not only depends on the carry (i.e. interest rates) but also on the oil price. And it will have to be seen yet whether the deal agreed by the OPEC and other oil producing countries is really effective. Otherwise the oil price might fall again, just like the ruble.
Hedging Strategy (USDRUB):
We kept urging for dollar’s hedging against ruble , below is instance where we’ve advocated the option strategy at spot ref: 68.86 then and now trading at 61.1057, please follow the below weblink for more reading on this.
At spot ref. 61.1057: we still like to continue with the same recommendation either long in 2m/1w diagonal USD/RUB put spread or shorts in near month futures, the RUB recovery now look too extended for a put position vs. the USD as from current levels we see only contained a further potential for RUB gains.
A 65.23/59.1040 diagonal put spread is likely to fetch for certain yields of the USD notional as it edges above up to higher strikes in next 1 week or so and slides as much as possible up to maturity on longs.
The risk is dubiously unlimited in shorts, the structure should benefit from a further compression in RUB volatility in a bullish scenario.
