Short term driving factors of RUB

The markets and commodities have been hit by rising Chinese woes, since August 15, and the correlation between RUB and oil prices eased, and Russian currency was affected more by global EM winds, which heads in the direction of Fed rate hike anticipations.

This was caused as the non-market factors impact came back on RUB, when non-market factors forced Russian state-owned companies to sell some of their accrued FX revenues.

There are several factors that are likely to pressurize RUB in short run. 

A build-up of long-positions in USD/RUB by private consumers to hedge their savings cannot be excluded, if or not the Brent price breaches USD 40 per barrel level.

Russia's debts in corporate sector crosses USD 400bn, which is still weighing on RUB. The outstanding FX corporate debt repayments are likely to decline in 2016.

If or not RUB volatility hikes, CBR is ready to provide abundant FX liquidity through FX repo auctions to subdue pressure on the rouble.

"Our USD/RUB one-month forecast (70.50) is influenced by our expectations on deteriorating EM sentiment due to possible Fed hikes while 3-12M (71.00; 72.50; 73.00) forecasts reflect elevated inflation (although slowing), the risk of weaker oil prices and the need for fiscal expansion ahead of the parliamentary elections while keeping the budget balanced", estimates Danske bank in a research note.