Fundamentally driven forecasting of Russian assets or exchange rate no longer makes sense, for now at least, according to economists at Commerzbank.

Intractable ruble

“In a narrow sense, the ruble exchange rate might reflect valuation appropriate for clearing the energy and commodity trade which Russia will continue to do. Even this will be full of caveats as western countries are rapidly announcing programmes to substitute away from Russian energy.”

“In the end, the exchange rate would be valued to reflect an economy which is retreating to a shell of its former condition. Optimists will look for some resolution on the geopolitical side after which the harshest sanctions might be reversed. Equally, pessimists will worry about the various possible military and other accidents – if any of those scenarios come to pass, that would keep Russia, like Iran, out of the mainstream world economy for the years to come.”