Wednesday, May 6, 2015

Russian Rubble Recovers on Stronger Oil

Interest rate cuts, rallying oil prices and an easing of tensions with neighboring Ukraine: Russia couldn’t ask for a better combination perhaps to bring it back from the brink of economic crisis.

Last week the country’s central bank slashed interest rates by a 150 basis points to 12.5 percent amid a recovery in the Russian ruble and signs that inflation in the country had peaked.

“The ruble has been on a tear from very depressed levels and this has a lot to do with oil, which is a huge performer,” Joseph Dayan, head of markets at BCS Financial, told CNBC on Tuesday.

“Close to 60 percent of Russia’s budget is dependent on oil or oil-related income, so not surprisingly, both of these moves are going together. There are other things that are coming together for the Russian story – geopolitical factors in particular,” Dayan added.

via CNBC

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