There’s been a significant volume of financial news this week — starting with currency markets.
The Central Bank of Russia (CBR) has published its foreign exchange market operation parameters for Q2 2026. It will now sell approximately RUB 600 million in foreign currency per day — down sharply from RUB 4.6 billion daily sales in Q1. In other words, downward pressure on the rouble may intensify.
The MOEX Index fell 5.6% last week, nearly testing the 2200-point level — a mark last seen in March 2023. The index has now declined for six consecutive weeks. Excluding the brief rebound during the week of 11–15 May, this losing streak extends to 15 weeks.
Why the Rouble and MOEX Index Fell So Sharply
I believe the primary driver is not macroeconomic fundamentals — but geopolitics:
Oil prices dropped sharply amid de-escalation in the Middle East. Brent crude has returned to pre-war levels, hurting Russian exporters. Discounts on Urals crude have widened further, and U.S. sanctions on Russian oil exports have been reinstated.
Strikes against Russian refineries have intensified. Public rhetoric now suggests the conflict cannot be halted at its current stage. Fuel queues have reappeared at gas stations — contributing to a broadly negative external environment where equity gains are virtually impossible.
Should You Buy Now?
Regarding currency: Last time, we discussed CNY/RUB scenarios and concluded that a breakout above 11.00 would likely target 11.25, then 11.50. Both targets were achieved — though the rate hasn’t yet reached 11.70.
The key question now is whether CNY/RUB can break above 11.60 — a strong technical resistance level. A confirmed breakout would open the path toward 12.00–12.05. In the current configuration, a short-term correction toward 11.00–11.20 is highly probable this week.
A portion of your portfolio may be held in foreign currency — though I’d avoid large allocations, given the CBR’s still-high key rate and the availability of high-yield rouble-denominated instruments.
That said, medium-term (up to one year) depreciation of the rouble remains plausible. So the answer is: Yes — a modest allocation to foreign currency makes sense. For example, yuan-denominated bonds (I hold a small position).
What About Equities?
There’s a realistic chance of a MOEX Index correction upward toward 2370 points — and possibly 2470. Support sits near 2250. If entering speculatively, always place a stop-loss just below that level.
The short- and medium-term trends remain bearish, while the long-term trend stays bullish. As always, distinguish clearly between long-term investing and short-term speculation.
Gasoline Situation
Most people have noticed things getting harder — but drone strikes aren’t the sole cause. Two major contributing factors are:
- Logistics bottlenecks: Fuel is available, but delivery capacity is strained — leading to local shortages despite adequate national supply.
- FOMO and speculative hoarding: Long queues trigger herd behaviour. Many are stockpiling fuel; others are reselling it at inflated prices.
FAQ
Why did the rouble weaken so sharply against the USD and EUR?
Due to falling oil prices, renewed U.S. sanctions on Russian oil, widening Urals discounts, and intensified strikes on domestic refineries — all amplifying geopolitical risk.
Is now a good time to buy CNY/RUB?
A breakout above 11.60 could target 12.00–12.05, but near-term correction to 11.00–11.20 is likely — consider tactical entries with tight risk control.
Should investors hold foreign currency amid high CBR rates?
Yes — a modest allocation (e.g., yuan bonds) helps hedge medium-term rouble depreciation risk, even with attractive rouble yields available.
