The Rouble has seen a nice steady increase in value over the past 3 months, but it looks as if it's finally turning around again. It still has some room for comfort, but what can we expect long term from this? More panic raising of interest rates down the line from Russia? http://www.bbc.co.uk/news/business/market_data/currency/11/158238/three_month.stm
There is no single answer to your question. I'm from Russia, and here, too, no one knows. There are many influencing factors. 1. The price of oil. 2. Inflation and interest rates 3. The growth of the free money supply 4. The policy of the Central Bank. The main thing is oil. If it grows, the current account of the balance of payments in favor of the ruble. Exporters sell dollars and euros, and buy the ruble. Interest rate is high and the carry trade is profitable. At the same time the Central Bank liquidity squeezes and no free rubles to buy the currency. By the way, the Central Bank intervened by buying currency to replenish its reserves.
Last I checked, the Middle East was flooding the market with unsustainable cheap oil, causing prices in the U.S. (at least) to go down to such an extent that many of our own oil ventures are barely profitable, or not profitable at all in some places. It's affecting prices here on a large scale, and it's probably going to get a lot, lot worse in Russia before this is all over. Not to mention, the ongoing issue with the Ukraine as well as Russian politics could have some serious consequences for the market in the short term.
I agree that bad policy is of great importance. I do not agree with this policy, but do not do anything. Most people think differently. As a result, the country has lost a lot of investors, refinancing has stopped because of sanctions and the outflow of capital in December '14 was huge. This was the reason for the collapse of the ruble Inflation also reached 17-18%. Because of the devaluation of the ruble and reduce imports. But everything has a border. Peak payments on the debt passed. Money market rates are high, and oil and gas exports are still profitable. In addition, the Central Bank acts very professional and well-managed liquidity. Now there is no one to sell the ruble, and no money to buy foreign currency. The deficit of ruble liquidity. A high interest rate makes it profitable carry trade. Yes, the ruble may fall to 70 rubles per dollar. But the above is unlikely, and it is not so much. The main unknown factor is the oil price. Ruble exchange rate is a function of oil prices by 80%..
Russia is a growing economy and there are still a lot of chances for it to pick up or expand in different areas. The oil prices falling is unfortunate but it could be a good driving force behind the next wave of venture capitalism. A weak ruble is sometimes a symbol for foreign investors to move in, and I'm inclined to see where the market goes before I discount the idea.
In the long term the ruble will decline. This is advantageous to many, including the Russian government. But the timing and details of this process are unpredictable. Regarding emerging economies. Paradoxically, the growing economies of bad investment. It may be a good speculation, if you catch the trend. If you want to sit on the money and have a stable income, it is better to do it in the advanced economies with competitive markets. I have a lot of time on the market. And regularly observe the fleeing of foreign investors who have lost money. However, you can try. Suddenly, you are lucky.
