The Russian Rouble has been one of only a handful of EM currencies that has outperformed the US Dollar this year. Economists at MUFG Bank expect the exceptionally strong gains for the RUB to reverse in the year ahead.

Scope for further weakness USD in the year ahead

“Even after the recent correction lower, the US Dollar remains at significantly overvalued levels against other major currencies leaving scope for further weakness in the year ahead. At the same time, we expect the Rouble to weaken in the year ahead following the sharp gains between March and June of this year.”

“We expect the exceptionally strong gains for the Rouble this year to reverse in the year ahead driven in part by curtailed energy export revenues (sanctions + lower prices) and a further easing of capital controls.”