The USD/RUB pair stands as one of the world’s premier currency duos, yet is far from being liquid. It reflects the relationship between US dollars and Russian rubles in value terms and attracts both traders and investors; furthermore it serves as an indicator for Russia’s economic health.
Formally, this pair was first established following Russia’s transition away from Soviet-based economic systems and toward market economies in 1992. For many years after, international transactions involved two currencies using US dollars as primary trading currency with rubles pegged against it as secondary. Since 2014 however, however, economic and political forces have led to its gradual erosion against dollar.
The USD/RUB currency pair’s dynamics can be affected by both internal and external forces, including changes to interest rates set by the US Federal Reserve System, economic growth and recession tends in the United States and worldwide, sanctions, the state of the Russian economy, and the monetary policy adopted by the Central Bank of Russia.
On September 15, a report of the Central Bank of Russia regarding a shift in the interest rates was released, as scheduled in the economic calendar. The current rate now stands at 13%, marking the fourth consecutive increase. This represents a 1% uptick compared to the previous month.
Given its relatively modest increase and release on Friday, market activity was relatively restrained — no significant fluctuations occurred in the USD/RUB exchange rate nor did any apparent affects befell the ruble.
Taking a look at the chart, it’s evident that the price is trading within a horizontal corridor of 92.00-100.00. To put it simply, the upper boundary is defined by a resistance level, marked by the historical milestone of 100.00, often referred to as a psychological barrier. Meanwhile, the lower limit rests at a relatively new level of 92.00.
It seems safe to expect that Russia’s ruble will decline further over the coming years due to current political and economic circumstances at home and internationally. Yet its economy holds potential for long-term strength that may help strengthen it further over time – particularly with regards to extractive industries development and industrial sector transformations.
