The crisis in the Red Sea may indirectly affect the ruble exchange rate through the dynamics of energy prices and the reaction of the global dollar. The first quarter may be the strongest for the ruble, at the peak the dollar exchange rate may drop to 85 rubles, but on average it should remain at 87-89 rubles. Alexander Bakhtin, investment strategist at BCS World of Investments, told socialbites.ca.
“On the one hand, the risks of oil and gas supply disruptions are quite serious, and the longer transportation problems in the region persist, the more serious the price premium resulting from the complication and increase in logistics cost may become. “In addition, difficulties in supplies from the Middle East may further increase the demand for Russian fuel,” he said.
Even if the crisis continues, he does not expect a significant increase in oil prices.
“Geopolitical tensions are strengthening the dollar, traditionally a safe-haven currency. The stronger the dollar is in the foreign exchange market, the more pressure the currencies and commodity prices of developing countries remain. In addition, the blockage of the Suez Canal will slow down global trade and ultimately negatively affect the growth rate of the global economy. This will again reduce prices and demand for energy resources,” said the investment strategist.
According to his assessment, the potential for an increase in oil prices if the crisis continues is not very high; Prices in such a scenario could reach $85-90, but it is unlikely to be higher. The expert believes that the impact of high rates in the Russian Federation will reach its peak in early spring; He noted that repatriation of export proceeds and control of foreign exchange sales by the regulator will remain other important pillars for the national currency.
Major shipping companies predict that the crisis in the Red Sea could last up to several months. Considering that the actions of the Yemeni Houthis are connected with the Arab-Israeli conflict, where de-escalation is still far away, it can be assumed that the situation may remain tense at least until the beginning of spring, Bakhtin said. He concluded.
Previously reportedHe said the situation in the Red Sea could lead to food shortages in Europe.