Russia & ruble macro updates
Regular insights on RUB moves, CBR policy, sanctions, reserves and broader Russian macro developments.
The Ruble thesis remains valid
Up ≈13% on the USD in the past quarter
🚨 Ruble is up 30% on USD 2025 YTD
82-68 is a strong support - including pre-Ukraine war liquidity
A small pullback is very likely to happen, but in the medium-long term it's heading towards the 68
Once sanctions are dropped by US & EU - RUB will skyrocket
🇷🇺 Russian Central Bank currently has interest rates at 21%
Yet the yield on a 10Y bond is 15.6%
I've previously written that the market is both, pricing in upcoming low(er) rates & paying a premium to stay in Ruble
Today, I found the targets for 2025 & 2026
🇷🇺 Budget deficit financing through the National Reserve Fund instead of bond issuance is one of the reasons why Ruble and the Russian bond yields have been doing so good
🇺🇸 $DXY is up - but not against $RUB 🇷🇺
Fundamentals speak louder than words
🇷🇺 Russia announced that they will cover their 2025 budget deficit not through the issuance of debt via government bonds, but via the National Reserve Fund - funded by natural resource surpluses
👉 Good news for the Ruble, of course
👉 Bond yields went down - 10Y is down ≈-3%
🇷🇺 TIL Russia has a National Wealth Fund
Excess oil & gas profits are credited to NWF
NWF funds are used to finance government deficit, instead of relying on debt issuance of Ruble (government bonds). Inflation-free deficit financing
🇪🇺 We need this in the EU for Euro
Correlation between Ruble & Gold 🇷🇺🥇:
Gold up ➡️ Ruble up
Gold down ➡️ Ruble down
Gold sideways ➡️ Ruble sideways
Russia could make RUB gold-backed, make RUB convertible to gold on demand & position RUB as a 'trustless'/money-backed currency
Already halfway through there
🇷🇺 Ruble is correlating with gold
This also explains the recent fall in price. Gold went down against USD & so did RUB
Such a retracement after multiple consecutive ATHs is expected
Fundamentals are still on the side of gold
🧠 Remember: gold is 35% of Russia's int'l reserves
🇷🇺 Ruble outflows into USD 🇺🇸
A lot of liquidity moved from RUB back into USD. This is also telling by the rebounded USD index
But gold will appreciate further. Russian Central Bank's massive gold reserves will pay off
🇷🇺 Russian Central Bank key interest rate is at 21%
3Y Russian Federation bonds are at ≈16.5% yield
The market is pricing in upcoming rate cuts
@AskPerplexity and @grok will tell you that Ruble & Russian economy are in a bad state. The reality is different
