RUB to weaker due to fall in current account surplus

Strong dividend payouts by Russian corporate will likely keep pressure on the RUB in the next 1-2 months by supporting meaningful capital outflows to offshore dividend recipients. 

Dividends constitute a large part of the negative seasonality in the Russian current account. In addition to the seasonal recovery in imports from the January-February slump, dividend flows in June-August strongly contribute to the seasonal widening of the income balance, which is the key driver of deterioration in the current account surplus. 

According to Bank of America, current account surplus is the key fundamental factor of RUB stability and strength, such weakness will likely keep RUB on the weaker side of its tentative RUB52/USD to RUB58/USD trading range. 

Bank of America says "We keep our current RUB55/USD forecast unchanged for now. Despite the likely short-term pressure from capital outflows and forced EXD deleveraging, the RUB could start receiving support from the likely reversal of massive FX positions in Russia. As a result, Russia has been buying FX since 3Q13 and throughout 2014."