As the G7 met this week in Germany, the rhetoric against Russia and President Putin continued down a sour path. President Obama hinted at further sanctions on an already crippled Russian economy, while Canadian Prime Minister Stephen Harper continued to promise Ukraine aid, and continued to place the blame for the fighting squarely on Russia.
There is no end to the sanctions in sight.
Despite this and despite capital swiftly fleeing the country with wealthy Russian oligarchs and foreign businessmen, it is not all doom and gloom for Russia. Although it’s a far cry from growth, the World Bank revised its economic projections for Russia for 2015 from -3.8% to -2.7%. This is mostly due to an improving oil prices, but also from retreating inflation, stronger internal manufacturing due to the collapse of imports, and, ultimately, a stronger currency.
Russian Ruble Against the US Dollar (June 2014- June 2015)
While the USD/RUB ratio almost hit 70 at the beginning of 2015, it now stands at 54.42, making gains today also within the EUR/RUB ratio. With Vladimir Putin’s decision to grant tax amnesty to wealth coming back to Russia, a stronger Rubble going into the second half of 2015 is now well in the realm of possibility..