Russia's Ruble Has Gone From Worst Currency To The World's Best

A man reads a newspaper under signs with currency exchange rates in Moscow, November 28, 2013. Credit: Reuters/Maxim Shemetov

Ksenia Galouchko, Bloomberg: Ruble Whipsaws Top Forecasters as Worst Currency Becomes Best

For one of the toughest jobs in financial markets, try predicting the ruble.

As Russia’s currency went from the world’s worst performer to the best in the first three months of this year, it caught out even the most accurate forecasters. Oil’s drop to near a six-year low and cuts in interest rates, previous indicators of a weakening ruble, were swept aside as the cease-fire in Ukraine became the bigger determinant.

“None of my expectations regarding the ruble came true,” Evgeny Shilenkov, the head of trading at Veles Capital LLC in Moscow, said by phone on Thursday. Shilenkov had forecast the ruble would weaken as much as 3.6 percent in the quarter. “This is our new reality -- there are too many different factors affecting the ruble, there are too many elements in the ruble matrix. The ruble is completely unpredictable.”

WNU Editor: This is one of the most under-reported stories from Russia in the past few weeks .... the rise of the Russian ruble has caught everyone outside of Russia by surprise. My cousins run a real estate/property company in Russia .... and they told me last month that the ruble would quickly recover because the fundamentals were all there, and that the money managers in the Kremlin were prepared to implement the necessary reforms/policies to stop the slide. Hmmmm .... it looks like they were right, and while I am still pessimistic for the long term .... the trends are proving me wrong.