The rebound in the Russian rouble is garnering much attention both sides of the Atlantic. Capital controls are set to remain in place, thus, the direction of the RUB relies on the purchases of oil and gas from Europe, strategists at ING report. 

Recovery 'is not sustainable'

“US Secretary of State, Anthony Blinken, said the rouble's recovery was unsustainable and artificially supported by capital controls. In addition to capital controls and a collapse in rouble liquidity, real sector flows are playing a role in supporting the rouble too. As long as foreigners, primarily Europe and Asia, buy Russian oil and gas, Russia will be receiving hard currency it can use to support the rouble.”

“Last week's decree from President Putin about 'unfriendly' countries needing to pay for Russian gas in roubles is playing a role too.”

“Presumably, Russian authorities are unlikely to lift capital controls any time soon and the fate of the rouble will very much be dependent on the continued Western purchase of Russian oil and gas.”