Russian ruble (RUB) discussion

[Joe Blow]

With the current political tension between Ukraine and Russia, I thought it was about time we had a general discussion thread on the Russian ruble.

A currency with a 500 year history, it has endured great social, political and economic changes and several redenominations, most recently in 1998.

The ruble is subdivided into 100 kopeks, and there are currently 35.73 rubles to US dollar. It is legal currency in Russia, South Ossetia, Abkhazia and it is used unofficially in Belarus.

If you have an interest in the Russian economy and/or the Russian ruble, feel free to discuss either of them in this thread.

 

[cogs]

I thought it may have been a worthwhile currency to trade against the USD, but it appears to not have much interest, with very wide spreads.

 

[PipSafe]

USD/RUB was in a strong and consistent uptrend during the recent months that buyers were successful in achieving the highest price of 54.90925.Right now in long term time frames such as monthly ,weekly and daily there is not any clear reason for increasing of the price and price with being above 5-day moving average in monthly, weekly and daily time frames warns about increasing of price during the next candles.According to the formed price movements in the chart, between the bottom price of 41.206726 and top price of 54.909252 ,there is AB=CD harmonic pattern with ideal ratios of 50 and 200 that with completion of the D point there will be a warning for descending of price.

Stoch indicator is in saturation buy area and in divergence mode with the price chart confirms the mentioned top price and warns about changing price direction.In the range of the D point, there are Hanging Man and spinning top candlestick pattern which is not a good sign for the buyers that there is the possibility for formation of a top price.Please note that Currently There is no clear and important sign(in daily and weekly TF) for descending of the price and the least sign for price reformation and increasing of the price is formation of a top price in daily time frame.

 

[luutzu]

When half the world is sanctioning against you, it's not going to go well for you for a while, a long long while.

 

[greggles]

When half the world is sanctioning against you, it's not going to go well for you for a while, a long long while.

It sure isn't.

http://tass.com/economy/998640

 

[The Triangle]

Ouch....

How much of the ruble devaluation is due to political issues and lack of confidence in the government rather than structural economic issues? You would have to think with Putin removed as dictator and a a return to a competent (or even half competent) government, the economy would do very will in Russia given the general low/cheap internal costs combined with the sheer value of the goods and resources they have to export.

 

[Dona Ferentes]

rubble

 

[Dona Ferentes]

Ouch....

How much of the ruble devaluation is due to political issues and lack of confidence in the government rather than structural economic issues? You would have to think with Putin removed as dictator and a a return to a competent (or even half competent) government, the economy would do very will in Russia given the general low/cheap internal costs combined with the sheer value of the goods and resources they have to export.

sadly, you could probably find a similar quote from Kerensky, in 1917

 

[Garpal Gumnut]

Ouch....

How much of the ruble devaluation is due to political issues and lack of confidence in the government rather than structural economic issues? You would have to think with Putin removed as dictator and a a return to a competent (or even half competent) government, the economy would do very will in Russia given the general low/cheap internal costs combined with the sheer value of the goods and resources they have to export.
View attachment 138329

I used follow the USSR and Russia mainly through the free independent press and TV we enjoyed in the old days here in Australia, John Le Carré's eyes in the 70's and latterly during the noughties via CNN.

It has had 500 years of despotic government of one type or another.

The people have a huge alcoholism problem, they believe they should be driving left hand drive vehicles on the left hand side of the road and cronyism and corruption is rife from local government right to the top.

Presently everyone is sh*t scared of the FSB and Vladimir Vladimirovich Putin (VVC), the successors to the dreaded KGB.

The economy is a kleptocracy and the army has bullied successive generations of conscripts to the point of madness. We talk about PTSD but the treatment of the boys who served Russia in Afghanistan and Chechnya is disgraceful.

Looking at the two moronic half cut Generals sitting at the far end of a very long table being told by V.V.Putin to use nuclear weapons reminded me, for the cinema buffs, of Dr. Strangelove meets Death of Stalin. It also makes me think it will be more of the same for these Russian soldiers.

The Ruble has certainly depreciated even more today v the dollar on the Xe chart @The Triangle , thanks for posting it.

Nonetheless it is an incredibly rich country, whose people I am told are welcoming and friendly. They lost millions of people during WW2 but since then Russia's leaders have probably caused an equal amount of pain to other countries such as Czechoslovakia, Hungary and others, as much as they suffered themselves.

I am not confident that when V.V Putin gets taken out sometime in the next few months that his successor will be any better.

The best predictor of future behaviour is past behaviour.

Let us hope I am wrong.

gg

btw I find the best method of following the events is to set your VPN to the UK and go to https://wwitv.com/tv_channels/b5791.htm

Click on News TV English and it will give you a choice all the way from Sky News UK ( not our idiotic one here ) to Russia Today (RT). I have not been impressed with the Australian coverage of events nor that of the BBC.

gg

 

[qldfrog]

Ouch....

How much of the ruble devaluation is due to political issues and lack of confidence in the government rather than structural economic issues? You would have to think with Putin removed as dictator and a a return to a competent (or even half competent) government, the economy would do very will in Russia given the general low/cheap internal costs combined with the sheer value of the goods and resources they have to export.
View attachment 138329

I disagree with the government competence and would much prefer have a Putin than a Biden or Morrison in charge.
The usd ruble rate has always been an indication of USA vs russia more than strength of the economy in the last 20y.
You remember Hillary during her campaign who basically wanted to nuke them?
So now that the democrats are in, they got their goal reached
If you do a bit of work, putin has been preparing for that a while back amassing gold and selling treasury bonds for years now, moving to non usd contract..yuan ...and reducing exposure well before Biden election
Russia is ready to cut the link and if the west does want to sever the link, be it.
But it will be very painful here with oil price..ahh well the green economy will save us.we always manage to beat ourselves it seems
My view is Putin will just fix the rate as per China and/ or create a new gold based probably crypto ruble for anyone willing to trade in the West block
Ps i am not paid by Vladimir ?

 

[Country Lad]

Nonetheless it is an incredibly rich country, . .................

gg

Most people do not realise the actual size of the Russian economy and only when compared to Australia can they understand that it ain't as big as imagined.

Russia - 11th largest economy
GDP – Nominal: $1.48 trillion
GDP per Capita: $9,972
GDP – Purchasing Power Parity (PPP): $4.02 trillion

Australia - 13th largest economy
GDP – Nominal: $1.33 trillion
GDP per Capita: $51,885
GDP – Purchasing Power Parity (PPP): $1.31 trillion
** $US 2020

I think that the PPP for Russia may have reduced more than a little over recent times.

 

[finicky]

From the brief attention I gave it, there's a youtube video out of Vlad the Poisoner speaking, where in addition to strict capital controls to protect the rouble he's saying that Europe and any other unfriendlies will have to pay for their Russian oil and gas in roubles. Surely that will give the RUB a lift if the importers comply?

 

[divs4ever]

well i wouldn't blame him , if he wanted payment in ( physical ) gold or silver ( delivered in Russia )

no matter what he has done in the past the West has done four times over to THEMSELVES

but unless the rouble is backed by silver or gold ( or oil ) it is just another fiat currency where trust is absolutely essential for it to have a function

HOWEVER China , India and Russia ( and a few others ) MIGHT have a feasible alternative in the planning

 

[JohnDe]

Russia’s economy is back on its feet​

A recession looms, but perhaps not a big one


May 7th 2022

In early april we pointed to preliminary evidence that the Russian economy was defying predictions of collapse, even as Western countries introduced unprecedented sanctions. Recent data further support this view. Helped along by capital controls and high interest rates, the rouble is now as valuable as it was before Russia’s invasion of Ukraine in late February (see top chart). Russia appears to be keeping up with payments of its foreign-currency bonds.

The real economy is surprisingly resilient too. True, Russian consumer prices have risen by more than 10% since the beginning of the year, as the rouble’s initial depreciation made imports more expensive and many Western companies pulled out, reducing supply. The number of firms late on their wage payments seems to be growing.


But “real-time” measures of Russian economic activity are largely holding up. Total electricity consumption has fallen only a smidge. After a lull in March, Russians seem to be spending fairly freely on cafés, bars and restaurants, according to a spending tracker run by Sberbank, Russia’s largest bank. On April 29th the central bank lowered its key interest rate from 17% to 14%, a sign that a financial panic which began in February has eased slightly. The Russian economy is undoubtedly shrinking (see bottom chart), but some economists’ predictions of a gdp decline of up to 15% this year are starting to look pessimistic.
Even before the invasion Russia was a fairly closed economy, limiting sanctions’ bite. But the biggest reason for the economy’s resilience relates to fossil fuels. Since the invasion Russia has exported at least $65bn-worth of fossil fuels via shipments and pipelines, suggests the Centre for Research on Energy and Clean Air, a think-tank in Finland. In the first quarter of 2022 the government’s revenues from hydrocarbons rose by over 80% year on year. On May 4th the European Commission proposed a ban on imports of all Russian oil that would come into full force by the end of the year. Until then, expect the Russian economy to continue to trundle along.

Russia’s economy is back on its feet

There's a reason for its resilience

www.economist.com

 

[qldfrog]

The rise of the Ruble is astonishing:
Against usd and even greater against euro:

While great to combat inflation within Russia and fight any sanctions related import price hike, it is not so great for exporters who get lower prices for their exports, when allowed to export.
Will Russia have to slow down that rise?
..i see the Ruble interesting as a proxy of real gold price when not manipulated by JPM.

 

[gartley]

It's amazing how things turn around and how psychology of people manifests itself in the markets. I have a close Russian-Australian friend who was so upset they they didn't buy USD with their rubles before the sanctions.
For them it was like the world was over with regard to anything they had left in rubles and their FOMO had them scrambling to buy at 120.

When I told them NOT to do this trade and said the ruble will be back to 70 in the months ahead they thought I was nuts. But when looking at the pattern in the chart attached which was a textbook long term EW pattern they really thanked me after.
This is why when we trade it's not just a matter of following your technical methodology alone but also to look at the psychology that portends a move and use other people emotion to your benefit. In this case the negativity of the ruble toward the USD was so extreme after that thrust up it and the fact that this was a 5th wave worked out really well.

Who woud have thought that the ruble would trading back under 70 again based on fundamental reasoning back then? Long term EW charts can be so powerful sometimes

This is my favourite EW pattern and probably the easiest to spot, a contracting triangle W4 followed by a w5 thrust and happen in every timeframe
Another one I am looking at closely now US stock NVAX but in the opposite direction. Let's see how it plays out in the weeks ahead