RUB took the lead among developing economies' currencies in terms of strengthening, though the fluctuations continue in February. The main impact factors are the external background, the reduction of the key rate and oil prices.
Over the past week, RUB managed to strengthen to USD by 1.4%; as of today, the currency pair is traded at ₽62.8404. EUR exchange rate went down by 0.8% to ₽69.6221. The Russian currency's strengthening was possible due to concerns about the spreading of the new virus in China, which threatened the entire global economy.
The oil market situation prevented RUB from enjoying a more material strengthening. The price of a barrel of Brent oil fell below the annual minimum. Currently, it is $54 per barrel. The second restraining factor was the Bank of Russia's purchase of foreign currencies under the budgetary rule. The third one was the end of the tax period.
Russian analysts forecast significant FX rate fluctuations in February. However, they believe that the growth of USD will be limited to ₽65 and its reduction will not go below ₽62.2. EUR is expected to fluctuate within the range of ₽68.8–70.5.
Experts agree that, on the mid-term horizon, the Russian currency will face gradual weakening. When the coronavirus panic fades away, the USD rate will likely stabilize around ₽63. If the external background does not get worse and oil prices begin growing, a more positive situation is possible.
Before long, RUB exchange rate may be affected by the key interest rate decision that will be made at the meeting of the Bank of Russia's Board of Directors. It will be held on Friday, February 7. The regulator will, most probably, reduce the key interest rate to 6%, i.e. by 0.25%. Such opinion is shared by the majority of experts. A sharp drop in oil prices is perhaps the only factor that could prevent this decision from being made.