Sanctions on Russian exports could require another substantial devaluation of the ruble – Credit Suisse

Economists at Credit Suisse think it is too early to determine how the structure of the FX market for the rouble will look like or at which levels USD/RUB could settle over the medium-term.

Full extent to which Russian entities will be excluded from the international financial system is not clear yet

“The full extent to which Russian entities will be excluded from the international financial system is not clear yet. Accordingly, it is too early to determine how the structure of the exchange rate market for the rouble will look like or at which levels USD/RUB could settle over the medium-term.”

“In the absence of further deterioration in the sanctions regime Russia’s substantial current account surplus and possible repatriation flows are likely to support the ruble. Alternatively, in a negative scenario, sanctions on Russian exports could require another substantial devaluation of the exchange rate.”