The Ruble has been continuously depreciating.

Looking back to this month last year, the ruble strengthened rapidly after the announcement of sanctions from the United States. At that time, there was a great deal of concern about the price of consumer goods, and the Russian government announced that only rubles would be accepted for the purchase of oil.

Currently, the exchange rate stands at 1 USD = 86.93 RUB. The depreciation this time is due to the ongoing war and the struggling domestic economy. Although there has been a slight increase in the Consumer Price Index (CPI) in Russia, it is not considered to have a significant impact. The Central Bank of Russia has kept its inflation rate at 7.5% after reducing it from 20% in the previous year. However, the central bank expects the inflation rate to be between 4.5% and 6.5% by the end of this year and aims to bring inflation back to the target of 4% within 2023.

Alexei Zabotkin, the Deputy Governor of the Central Bank of Russia, stated that the risks that arise tend to be biased towards currency inflation risks. He mentioned that this might lead to an increase in the key interest rate from 7.5% at the next meeting on July 21.

When we look at the expenditures that occurred, the state budget has significantly decreased in the past year, which is expected to lead to increased debt. The expenses related to the war have increased significantly, including accelerated defense spending, declining trade, and a challenging labor market with high demand for manpower. These factors contribute to the ongoing risk of currency inflation. Although expenses have increased significantly due to the war, Russia's trade balance has been reasonably balanced, with a surplus of $21,173 million. Export revenue, especially from oil and natural gas, is considered a significant income source within the country.

Despite the risks and the economic downturn that affects trade, there is still a demand for oil domestically. Reports have shown a significant increase in profits from oil sales, reaching the highest level in three years, with major trading partners being India and China, both of which are part of the BRICS group.

Last week, there was a violent uprising by insurgents, causing significant unrest within the country. However, even with such events, the uprising quickly subsided. Some may argue that this could be a grand scheme or manipulation to deceive other countries.

Technical analysis data (5H)

Resistance: 86.7928, 87.1793, 87.5215

Support: 86.0641, 85.7219, 85.3354

Source: Investing.com