Forecast of changes in Russian and Ukrainian currency markets

摘要

Geopolitical risk premium as a component of the rouble exchange rate has dropped substantially amid the ongoing negotiations with the US, an unexpected (for many observers) thaw in relations between the two countries, as well as the Central Bank's decisions and rhetoric. Influenced by already implemented and announced incentives (budgetary ones and those from the Federal Reserve System), the US dollar index relative to a basket of other reserve currencies has also been decreasing. Nevertheless, the rouble has already pared most of its losses against the March-April peaks triggered by foreign policy tensions. If relations with the US keep improving, the Russian currency may appreciate further, albeit insignificantly by several dozen kopecks p