Banking in Russia

[Enter reference here]
04/02/2014 17:58

Russian economy
How to change this “new normality”?

Dmitry Polevoy, PhD
Chief Economist, Russia & CIS
Moscow
February 2013

04/02/2014 17:58

Part I

RUSSIA IN A GLOBAL CONTEXT – FROM A
BIRD’S-EYE VIEW

7 January 2009

1

04/02/2014 17:58

Russia – the 6th largest economy globally
25%
2000

2012

20%
15%

A rise from 2.6% to 3%
10%
5%
0%

Source: IMF
7 January 2009

2

2013-18 expected GDP, %YoY

Slower expected GDP growth – a story of
higher wealth, but only partly

04/02/2014 17:58

8%
CHN

7%
6%

KAZ

5% IND

TUR

4%

ZAF

3%

MEX

POL CZE

BRA

2%

BGR

UKR

1%

KOR

RUS

JPN

HUN

0%
0

10000

20000

30000

40000

GDP per capita, US$ PPP
Source: IMF
7 January 2009

3

04/02/2014 17:58

2000-08 avg. CPI growth

Historically high inflation was a natural pay
for rapid economic growth before the crisis…
30%
TUR

25%
20%

RUS

15%
10%

HUN

UKR

BRA

5%
0%

BGR

ZAF

MEX POL

KOR

KAZ
IND

CZE

CHN

-5%
2%

3%

4%

5%

6%

7%

8%

9%

10% 11% 12%

2000-08 avg. GDP growth
Source: IMF
7 January 2009

4

2010-13 vs 2000-08 CPI

…but now slower growth serves as key
disinflationary factor in many countries

04/02/2014 17:58

10%
5%

CHN

KOR BRA

CZE

0%
BGR
-5%

-10%

IND

RUS

KAZ

HUN

ZAF

JPN
MEX

POL

UKR

-15%
TUR
-20%
-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

2010-13 vs 2000-08 GDP
Source: IMF
7 January 2009

5

04/02/2014 17:58

2010-13 vs 2000-08 CPI

Inflation vs Unemployment – a mixed pattern
10%
5%
CHN

KOR
0%
-5%

BRA

POL

CZE

KAZ
RUS

-10%

ZAF

MEX

BGR
UKR

-15%
TUR
-20%
-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

2010-13 vs 2000-08 unemployment
Source: IMF
7 January 2009

6

2000-13 avg. budget balance

Russia still has superior government
budget/debt metrics (% of GDP)

04/02/2014 17:58

5%
KAZ
RUS
BGR

0%

KOR
ZAF

MEX
CZE
CHN TUR
POL
UKR

-5%

BRA
HUN

IND
-10%
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Gross public debt, 2013F
Source: IMF
7 January 2009

7

04/02/2014 17:58

Part II

RUSSIA ECONOMIC OUTLOOK

7 January 2009

8

04/02/2014 17:58

GDP: Even 2% looks good now for Russia…
15

12  GDP growth slowed from 3.4% to 1.3% in 2013

GDP growth by key components

10

8

5

4

0
0

-5
-10

Contribution to GDP, ppt

-4
-8

-15

Priv. cons-n
Inventories

Gov. cons-n
Net export

Investments
GDP,%YoY (rhs)

PMI composite index flags GDP growth at 2% at best
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%

60.0
57.5
55.0
52.5
50.0
47.5
45.0
42.5
40.0
37.5
35.0

PMI composite
7 January 2009

despite remaining consumption growth GDP,
which totally added 2.3ppt…
 …while other items dragged GDP down –
inventories (-0.8ppt), net exports (-0.2ppt) and
investments (-0.1ppt).
 Zero contribution of the public consumption to
GDP looks extremely challenging, especially
under mounting calls for extra fiscal boost
 Our base-case forecast has been 2.3% for
2014, while downside risks are mounting with
something near 1% looking as the worst-case
 4Q13 rise in PMI indices seems to haven’t
translated into stronger GDP expansion and
weak January PMI manuf. flags stagnation

GDP growth, %Y oY
9

04/02/2014 17:58

Export – minerals, import – nearly all the rest
External trade breakdown (% of total)

 Whether oil-dependence is a gift or a curse for
the outlook – a source of long disputes…

Others
Machinery /transport

 …but the WTO accession is no doubt a key for
structural changes needed to reduce economic
and fiscal vulnerability to oil price swings

Metals
Textile

Export

Import

Wood & paper
Chemicals
Minerals
Food
0%

20%

40%

Others

60%

80%

Trade balances in
US$bn

Machinery , transport
Metals
Textile, f ootwear
Wood & paper

US$247bn

Leather, f ur
Chemicals
Minerals
Food, agriculture
-100

-50

0

2001-2003 av g

50

100

2009-2011 av g

Source: Rosstat, ING
7 January 2009

10

04/02/2014 17:58

Export: Growth rates vs “World” GDP
 Weighted-average GDP of key Russia trade partners is seen at 2-2.3% in 2014-15 vs 1-1.5% in 2013,
1.1% in 2012 and 2.5% in 2011…
 …while the Euro-component of global growth is key risk, given 50% of exports goes to Europe
25%
20%
2004- 2010

2011- 2013

Russia export grow th

15%
10%
5%
0%
-5%
4Q08-3Q09

-10%
-15%
-20%
-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Trade partners grow th
Source: Rosstat, Customs Service, ING
7 January 2009

11

04/02/2014 17:58

Imports: Will remain a function of domestic
demand performance
 After a visible decoupling from domestic demand in 2011, imports growth has “normalized”…
 …and despite recent exports acceleration in 2013, imports will likely continue growing faster
40%

The gap conv erged and won’t likely reappear

30%

20%
15%

20%

10%

10%
5%
0%
0%
-10%
-5%

-20%
-30%

-10%

-40%

-15%

Ex ( real %YoY )

Im (rea l % YoY)

Domestic d emand proxy (rh s)

Source: Rosstat, Customs Service, ING
7 January 2009

12

04/02/2014 17:58

Personal income & wages: supported by low
unemployment and social skew of the budget
30

Nominal wage growth: public vs private sectors
Contribution to nominal
wage growth (ppt)

25
20

 Solid wages growth since late-2011 was spurred by
not only a healthy employment, but also a doubledigit rise in public and military & police salaries
 Private sector ‘s adding to wage growth has been
moderating to 5-6ppt since 2H12 (vs 10ppt in 20111H12) due to corporates’ cost controls…

15
10

 …while 2014 freeze of public wages and only
moderate hikes in 2015-16 will reduce their
contribution to the overall wages growth too

5
0

Private wa ges

Pub lic wages

 Worsening demographic trend is a challenge for
growth/budget, but supportive for employment

Key income indicators vs unemployment rate
20%

5.0%

12%

6.5%

4%

8.0%

-4%

9.5%

Demographic trend vs unemployment

64%

11%

MinEco f orecast

62%

10%
9%

60%

8%

58%

7%

56%

% of working-age population

30
20

27
20

24
20

21
20

18
20

15
20

12
20

09
20

06
20

20

20

Real wage
Disp. income
Unemployment rate (rhs)
Unemployment, seas-adj (rhs)

03

4%

00

11.0%

6%
5%

52%

-12%

54%

Unemploy ment rate (rhs)

Source: Rosstat, MinFin, MinEco, ING
7 January 2009

13

Russia leads in the CIS, but still lags
behind the US by labor productivity

04/02/2014 17:58

Labor productivity vs the US level (GDP per employee, converted to US$ using PPP)

45%
40%
35%
30%
25%
20%
15%
10%
5%
199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0 201 1 201 2
Russia

Ukr aine

Kazakhsta n

Source: Ukrstat, CEIC Database, ING
7 January 2009

14

04/02/2014 17:58

Lagging labor productivity vs real wages
is still the biggest challenge…
Cumulative growth of labor productivity vs real wages

Manufactu ring
Transport/Tel cos
Real estate
Russia avg.
Trade
Mining
Agr icul ture
Utili ties
Constru ction
Hotels/catering
Fish ery

Growth over 2010-12

-10% -5%

0%

Real wages

5%

10% 15% 20% 25%
Labor productivity

7 January 2009

15

04/02/2014 17:58

…reflected in still rising Unit Labor Costs
 Unit labor costs rose by nearly 50% since 2003 in Russia, more than doubled in Ukraine and
advanced by only 30% in Kazakhstan
Unit Labor Costs (ULC, index, 2003=1)

2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8

Ukr aine

Russia

Kazakhsta n

Source: Ukrstat, CEIC Database, ING
7 January 2009

16

04/02/2014 17:58

Savings & borrowings: Room for balanced
lending growth and a bit higher savings
Lending growth and banks funding status
135 %

75%

130 %

60%

125 %

45%

120 %

30%

115 %

15%

110 %

0%

105 %

-15%

Loans-to-deposits ratio (rhs)
Retail loans, %YoY
Corp. loans, %YoY

 Post-crisis rally in retail loans (38%YoY avg since
Jan-12) and low savings spurred consumption…
 …but also pushed leverage indicators to record
highs despite 20+% cost of loans, requiring more
funds to service debts
 2014-15 will likely see a turn back to a more
balanced growth, incl. due to moderating demand
from households, banks willingness to lend as
freely as before…
 …as well as further CBR measures
Retail debt servicing

Consumer leverage indicators vs savings rate
28%
26%
24%
22%
20%
18%
16%
14%
12%
10%

39%
37%
35%
33%
31%
29%
27%
25%
23%
21%

30%
25%
20%
15%
10%
5%
0%

Retail loans to income

Savings+FX, % of income

Retail loans to wage (rhs)

Retail debt payments (principal+interest) as % of annual incomes
7 January 2009

17

04/02/2014 17:58

GDP growth vs Gross National Savings
Avg. 2000-2008

Avg. 2009-2013
55%

50%

40%
35%
KOR

RUS

30%
JPN

CZE

IND

KAZ

25%
UKR

MEX
POL

20%
HUN
15%

BRA

TUR
ZAF

BGR

3%

6%

45%
40%
35%

9%

12%

GDP growth, %YoY

KAZ

RUS
25%
20%

IND

KOR

30%
CZE
HUN

JPN
BGR

15%
UKR

10%
0%

50%

Gross nat. savings, %/GDP

45%

Gross nat. savings, %/GDP

CHN

CHN

10%
-3%

MEX
POL
BRA
TUR

ZAF
0%

3%

6%

9%

12%

GDP growth, %YoY

 Economic theory and recent history suggest that Gross National Savings remain key GDP driver…
 …and post-crisis period proved again that lower savings seem to have contributed to slower growth
Source: IMF, Rosstat, Ukrstat, Customs Service, CEIC Database, ING
7 January 2009

18

04/02/2014 17:58

Manufacturing sector operates nearly close
to pre-crisis capacity utilization
80

Avg. capacity utilization rate (% of total available)

80

75

75

70

70

65

65

60

60

55

55

50

50

45

45

Mining

Manufacturing

Utilities

Source: Rosstat
7 January 2009

19

04/02/2014 17:58

Investments: Now more self-reliant, while still
sentiments-driven and conditional on oil…

 Post-crisis reality forced companies to rely mostly on
own funds when funding capex programs…

Investments by funding sources (% of total)
100%
20%

22%

16%

22%

22%

22%

21%

20%

21%

21%

22%

6%
10%

6%
9%

7%

11%

25%

26%

20%

19%

6%
9%

5%
8%

23%

80%
20%

18%

60%

7%
8%

9%
5%

22%
7%
7%

11%

40%

20%

45%

45%

48%

42%

40%

39%

9%

37%

41%

42%

18%
5%
8%

45%

0%
2003
2004
Current/retained profit

2005
2006
2007
2008
2009
2010
2011
2012
Bank loans Non-bank loans Budget Others (incl. intercompany loans)

 …with falling role of fiscal & bank funding and more
focus on intercompany loans…
 Uncertain outlook and falling profits clearly depressed
investments…
 …with strong profits link to RUB oil price flagging key
risk for investments outlook
 Pre-tax profits dynamics looks weak and recent
improvements have been only marginal with only
mining and telecoms seeing profits growth in 11M13
Corporate profits dynamics (% YoY)

Corporate profits vs oil price in RUB
900 0
800 0
700 0
600 0
500 0
400 0
300 0
200 0
100 0

400 0
360 0
320 0
280 0
240 0
200 0
160 0
120 0
800

90%
60%
30%
0%
-30%
-60%
-90%
-120 %

Pre-tax profit, 12M rolling (RUBbn)

Urals, RUB/bbl (rhs)

7 January 2009

20

Investments: still hoarding cash –
preparing for the worst?
90%

Fixed investments dynamics and financial indicators

80%

30%
20%

70%

10%

60%

0%

50%

-10%

40%
30%

-20%

20%

-30%

Corp.deposits/12M investments
12M pre-tax profit/12M investments
Current accnts/12M investments
Investments, %YoY (rhs)
120 00

Corporate funds in banks (RUBbn)

100 00

04/02/2014 17:58

 BUT...
 ...corporate funds in banks have continued rising
not only as a share to annual investments...
 ...but in absolute terms as well…
 ...which could indicate several factors, including
future external debt repayments, M&A activity
etc. as well as extremely uncertain macro
outlook…
 In any case, it is an issue how to force
companies to start spending all this cash pile

800 0
600 0
400 0
200 0
0

Corp. d eposits

Corp. curre nt accounts

7 January 2009

21

04/02/2014 17:58

Investments: Lower public investment
takes its toll as well...
120 %

Investments by form of property
(nominal %YoY growth)

90%

 In 2009-12 nominal private investments grew by
60% vs 20% in the public sector…
 …and the breakdown by source of funds helps to
make the similar conclusion on budget money…

60%

 In 9M13 gas sector, transport and utilities made the
lion’s share of overall decline in investments…

30%

 …and deteriorating fiscal outlook makes the
overall investments performance even more
sensitive to private sector behavior...

0%
-30%

Federa l
Municipal

Region al
Private se ctor

Investments by source of funding (nominal %YoY 4Q growth)
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%

 The planned usage of the National Wealth Fund
money for infrastructure spending may improve
the short-term outlook
9M13 investments of big & medium corporates (ppt. contribution)

Others
Trade
Oil sector
Agr icul ture
Social
Real estate
Manuf. exl. oi l
Constru ction
Telecoms
Transport excl. p ipes
Utili ties
Natural gaz
Tota l

-6.5 ppt of total 6.9 ppt

-7
Bud get funds

-6

-5

-4

-3

-2

-1

0

1

Non-bu dget fund s

7 January 2009

22

04/02/2014 17:58

Inflation – mostly a non-monetary
phenomenon…
Oil vs producer energy prices (%YoY)

 INGF for Brent of US$105-110/bbl flag energy price
pressure on PPI inflation to be modest in 2014-15…

ING forecast at
100%
US$105-110/bbl
80%
60%
40%
20%
0%
-20%
-40%
-60%
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Oil export net-back
Urals

 New tariffs hikes schedule, good grains harvest, a
reversal of the base effect and no monetary
pressure will push CPI to CBR targets in 2014-15
 Key risks are local/global food prices dynamics,
pass-through effects of weaker RUB and the
expected rise in alcohol/gasoline/tobacco excises

PPI mining sector (lhs)
PPI oil products

CPI inflation by key components

% MoM
3.0%

 …which together with contained pricing activity in
manufacturing/services is good for CPI outlook

% Y oY
16%

2.5%

14%

2.0%

12%

1.5%

10%

1.0%

8%

0.5%

16%

Money supply and core inflation

60%

ING forecast

14%

50%

12%

40%

10%

30%

8%

20%

6%

6%

10%

0.0%

4%

4%

0%

-0.5%

2%

2%

-10%

0%

-20%

Food

Non-Food

Services

Inflation (rhs)
Series1

Core CPI

M2 gr owth, 15m l ead ( rhs)

7 January 2009

23

04/02/2014 17:58

...and the recent tariff decisions reduce risks,
even though not fully
 A freeze/slower hikes in utilities tariffs for corporates/households – key disinflationary factor…

 ...however the planned hikes of excises on alcohol (18-20% avg.), tobacco (30-50%) and gasoline (510%) in 2014-15 will continue keeping their toll on inflation given their 9% share in consumer basket, ie
nearly the same as utilities tariffs
10%
9%

A shif t in tarif f s hike f rom
January to July

17.5%
15.0%

8%

12.5%

7%

10.0%

6%

7.5%

5%

5.0%

4%

2.5%

3%

0.0%

2%

-2.5%

Food, e xcl. fruits/vegetable s and alcoho l
Non-food, excl. g aso line
Ser vices, excl. housing, uti litie s and transport
Core CPI
7 January 2009

24

04/02/2014 17:58

Subdued inflation in core manufacturing
sectors – well done, but could it last forever?
Selected producer price indices (December 2009=1)

1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0

Manuf. sector excl. gasoline

PPI utilities

PPI gasoline

7 January 2009

25

04/02/2014 17:58

Local grain prices have started drifting lower,
recovering a discount to the global market
Dynamics of local and global wheat prices, CRB food index

550
500
450
400
350
300
250
200

120 00
100 00
800 0
600 0
400 0
200 0

Local wheat price (RUB/t)

Global wheat price (RUB/t)

CRB food price index (rhs)
Source: Bloomberg, Rosstat, ING
7 January 2009

26

04/02/2014 17:58

CBR policy outlook – a balancing act for CPI,
growth, RUB and liquidity
Banking sector liquidity (RUBbn)
490 0

250 0

420 0

200 0

350 0

150 0

280 0

100 0

210 0
140 0

500

700

0

0

Corresp.accounts

Banks deposits

CBR notes holdings

CBR loans (rhs)

Factors affecting local liquidity
10
8
6
4

RUBtn

 After two years of steady liquidity sterilization,
budget started taking money off the system slowly
due to fiscal deficit…
 …while the CBR is still acting as a “lender of last
resort” keeping monetary inflation in check
 Above-target CPI and high inflation expectations,
lower potential GDP growth (1.5-2%) and RUB
weakness will likely keep the CBR on hold till 2H14
 New refinancing facilities (312-P loans, min. 3M rate
5.75%) will likely be used to target 3M MosPrime rate
down from current 7.20-7.25%
10%

Key policy rates vs money market O/N rate

10%

9%

8%

7%

7%

6%

6%

5%

5%

4%

4%

3%

3%

2%

2%

1%

1%

0%

2
0
-2
-4
-6

9%

8%

0%

O/N MM

Budget

RRR

FX-interventions

CBR refinancing

Refi rate

O/N RUB swap

CPI, % YoY

Core CPI, %YoY

Cash

Auctio n REPO

Fixed REPO

O/N depo

7 January 2009

27

04/02/2014 17:58

RUB – the CBR has continued adding more
flexibility to the RUB
CBR FX policy – How it worked...
Corridor

Width

Range

 CBR had kept details on its FX-policy mechanism a
secret, but in early October disclosed in full…

Volume of
including
interventions, US$mn un-planned

 ...in order to proceed on its way to inflation
targeting and full RUB flexibility since 2015

41.30

Upper bound
1 ruble

40.30 - 41.30

-400

250

CBR sells FX 1 ruble

39.30 - 40.30

-200

50

1 ruble

38.30 - 39.30

-70

0

37.30 - 38.30

0

0

36.30 - 37.30

70

0

CBR buys FX 1 ruble

35.30 - 36.30

200

50

1 ruble

34.30 - 35.30

400

250

Neutral - no
CBR
1 ruble
interventions
1 ruble

Lower bound

 To succeed in this, the CBR cut the volume of
planned interventions finally to zero in Jan-14
reacting to worsened BoP balance...
 …and reduced the threshold for a 5 kopecks
corridor shift to US$350mn while still keeping the
width of the floating corridor at 7 rubles

34.30

…and how it works now
Corridor

Width

Upper bound
CBR sells FX

Lower bound

Volume of
including
interventions, US$mn un-planned

MinFin
operations

41.30

0.95 ruble 40.35 - 41.30

1 ruble
Technical
0.1 ruble
corridor
Neutral - no
CBR
3 ruble
interventions
1 ruble
CBR buys FX
0.95 ruble

7 January 2009

Range

-400

-400

39.35 - 40.35

-200

-200

39.25 - 39.35

0

0

36.25 - 39.25

0

35.25 - 36.25

200

200

34.30 - 35.25

400

400

MinFin
purchase/sale of
+
FX for/from the
0
Reserve Fund

34.30
28

04/02/2014 17:58

RUB vs Oil prices – on diverging paths
RUB remains correlated with oil price, but periods of weakening/broken correlations occur more often and
expensive oil is already not enough for the RUB to grow steadily

42.0
41.0
40.0
39.0
38.0
37.0
36.0
35.0
34.0
33.0
32.0
31.0

50
60
70
80
90
100
110
120
130
140
150

RUB/basket
7 January 2009

CBR coridor

Urals, US$/bbl (rhs)
29

RUB – capital flight is a pay for
higher RUB flexibility, but not fully
100
75
50
25
0
-25
-50
-75

Balance of Payments breakdown
US$bn

TB (goods+serv.)
F/A-govnmt
Errors/omissions

60
40
20
0
-20
-40
-60
-80

C/A others
F/A-banks
Capital flight, rhs

US$bn 80 
50
20
-10

-40
-70
-100

-130

Cap/A
F/A-corporates

04/02/2014 17:58

High oil prices have supported decent C/A surplus, but
it will likely continue evaporating with services
trade/income earnings acting further as a drag
4Q-rolling non-energy C/A deficit hit US$315bn in 4Q13
and will likely continue rising making the RUB fragile
High capital outflows is a partial reckoning for higher
RUB flexibility under decent C/A surplus…

 …while “dubious”&”errors/omissions” piles of capital
flight is also high with others of a lower scale
 Unchanged political/institutional environment, lower
privatization plan, MinFin FX-purchases – risks to RUB

BoP financial account components (US$bn, 4Q-rolling)

Total and non-energy C/A balance (US$bn)
150

0

100

-50

50
0

-300

-200

7 January 2009

-250

-150

Source: CBR, Rosstat, ING

-200

-100

PI
C.accts/dep o
Dubious de als
Errors/ommission s

-150

-50

FDI
FX-ccy
Loand /borro wing s
Others

-100

-350

Curren t accnt.
Capital flo ws
30

04/02/2014 17:58

RUB: Low C/A surplus should naturally cap
future capital outflows
40
30
20
10
0
-10
-20
-30
-40
-50
-60

2007-1H09

Capital flows (US$bn)

2H09-4Q13

C/A balance (US$bn)
-10

-5

0

5

10

15

20

7 January 2009

31

04/02/2014 17:58

RUB: REER has been retreating from all-time
highs of 2012-13…
 Real RUB strengthening is mostly irrelevant for exports, but still important for imports supporting it
1.9

3.0

1.8

2.8

1.7

Stronger RUB

2.6
2.4

1.6

2.2

1.5

2.0
1.4

1.8

1.3

1.6

1.2

1.4

1.1

1.2

1.0

1.0

USD/RUB

EUR/RUB

REER

Imports, SA (rhs)

7 January 2009

32

04/02/2014 17:58

…and more weakening is likely needed to
adjust for its overvaluation vs CEEMEA peers

50%:50% EUR: USD basket,
% chng since Jun-09

 Assuming 3%/1.5% CPI differential over 2014-15 and a further correction back to zero REER change, we
arrive at 44-45/basket projections for the RUB by 2015-end…
 …but key is whether markets will be able to drive this adjustments over a relatively short period of time?

20%
CAD

10%

ILS

PLN

NOK

0%
-10%

BRL

MXN

CZK
HUF

-20%
-30%
ZAR
-40%
-50%
-15% -10%

Strong ccy

RON

AUD

RUB

Should be somewhere here after
7% YTD drop
NZD

INR
TRY
-5%

0%

5%

10%

15%

20%

25%

REER, % chng since Jun-09
7 January 2009

33

04/02/2014 17:58

RUB fair-value – Current Account-based
estimates flag overshooting at current levels
 Our “fair-value” RUB estimates based on the C/A balance flag 35.5-36.0/USD by 2014-end…
 …while still not as high as current 35+/USD over January-March, flagging an overhooting

37.0

1.15

35.0

1.22

33.0

1.29

31.0

1.36

29.0

1.43

27.0

1.50

USD/RUB - actual
EUR/USD

7 January 2009

USD/RUB - C/A-based

34

04/02/2014 17:58

Has the RUB already prices in the USD rally
expected later in 2014?
95

37

90

35

85

33

80

31

75

29

70

27

US$ index (DXY)

7 January 2009

USD/RUB

35

04/02/2014 17:58

ING FX Forecasts
ING forecasts
End of period
EUR/USD
USD/RUB
EUR/RUB
Basket/RUB
Brent (US$/bbl, eop)

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1.38
32.9
45.3
38.5
105

1.33
34.0
45.3
39.1
105

1.3
34.6
45.0
39.3
105

1.25
35.0
43.8
39.0
105

1.2
35.7
43.0
39.0
110

1.2
35.0
42.0
38.2
110

1.2
35.6
42.75
38.8
110

1.2
36.2
43.5
39.5
110

1.2
36.7
44.0
40.0
110

Source: ING

7 January 2009

36

04/02/2014 17:58

Disclosures and
Disclosures disclaimer
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7 January 2009

37

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