US President-elect Joe Biden’s team is discussing a possible Russian response after a massive hacker attack. Reuters reports that after the inauguration, the Biden administration will consider possible options for Russia’s response. Among them is the imposition of tough economic sanctions or a cyberattack on Russian infrastructure.
How serious are the risks of another economic sanctions? Does this mean that the ruble has reached its peak and will now roll back down? AMarkets experts answered the question of Fortrader magazine.
– The coming to power of the Democrats is indeed a “bearish” factor for the Russian currency. It is expected that after Biden’s inauguration, the sanctions pressure on Russia will increase significantly. Moreover, the new restrictions may apply to Russian sovereign debt, which in fact will mean a ban for foreign investors to work with federal loan bonds. In this scenario, the Russian economy will face a liquidity crisis and, most likely, large-scale capital outflows.
The current situation for the ruble is exacerbated by the reversal in oil prices. Apparently, the fears of traders about the negative impact of the coronavirus pandemic on global economic activity and demand for raw materials began to be realized. If the market confirms the information that the new COVID-19 strain is more infectious and resistant to previously developed vaccines, the oil market will face a new collapse with a 50% probability of collapse. In this case, the new reality for the USD / RUB pair will be well above 80.00.