By: Anna Fedorova
Over the last three months, the Russian rouble has outperformed many emerging market currencies, buoyed by rising oil prices and an accommodative central bank, but it continues to suffer under the pressure of potential fresh US sanctions against Russia.
A fresh round of sanctions could block US imports of Russian oil and ban international bank loans to the country, and could come in as early as next month, according to reports. Earlier this year, the US initiated a first round of sanctions that stopped the sale of arms and exports of national security-sensitive goods and technology to Russia.
Yet, the currency has held up better over the last quarter than some of its EM counterparts, falling just 5.2% against the US dollar, according to JPMorgan, and outperforming the Turkish lira (-17.9%), Argentine peso (-25.6%) and South African rand (-8.2%).
A key driver for this outperformance has been rising oil prices; Brent crude is up some 14% this year, to trade at $76 a barrel as of October 24. The price is expected to go higher.