Rouble Resilience: Russia's Currency Faces Challenges Amid Oil and Geopolitical Tensions

On Thursday, Russia's rouble experienced a marginal decrease, with its value slipping to 80.37 against the dollar, marking a 0.1% decline, and a 0.2% decline against China's yuan. This occurred amidst rising oil prices and continued uncertainty over the Ukraine conflict resolution.

Despite elevated inflation expectations and persistent deflation for the fifth consecutive week, Russia's annual inflation declined to 8.46%. Analysts from Renaissance Capital suggest a cautious approach to monetary policy, advocating for a potential 100 basis point interest rate cut.

The situation is compounded by the approaching tax period, which usually supports the rouble as exporters sell currency for tax payments, and the effects of Russia's high central bank key rate, which aims to stabilize the currency during geopolitical tensions.