Quotes from BNP Paribas:- In 2014, the Russian economy has been facing exceptional circumstances. Throughout the year, Russia has balanced on the brink of recession, which is masked by a sharp fall in imports. The geopolitical standoff, international economic sanctions and a steep and continuing decline in oil prices may prove poisonous for the economy. – The rouble depreciation has accelerated in recent weeks primarily due to a steep and continuing decline in oil prices. As oil prices are testing new lows, oil-exporters accumulate FX cash and investors withdraw from Russia, the rouble keeps falling. The worst is yet to come – The Central bank has a poor margin of manoeuvre to prevent a self-fulfilling currency crisis amid declining oil prices unless it introduces capital controls (most probably indirectly, i.e. forcing state-owned enterprises to sell revenues in hard currencies). Volatility will remain high in the coming months.
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