The Pound Sterling (GBP) to Russian Ruble (RUB) exchange rate hit a record high on Friday before easing slightly on concerns over nest weeks Scottish Referendum. Against the US Dollar (USD), the Ruble also declined to a new record low as the EU and USA imposed new sanctions.
Concerns are building that the newly announced sanctions are likely to illicit retaliatory measures from Russia, which in turn could have a negative impact upon the wider global economy. Previous sanctions have resulted in the Eurozone being negatively affected.
‘Market sentiment towards the Ruble remains negative, and retaliatory measures from Russia seem certain. Such trade restrictions damage both Eurozone and Russian growth prospects and will keep the Euro and the Ruble pressured,’ said a Sberbank CIB analyst.
The last batch of sanctions issued by the EU saw Russia counter by banning the import of some foodstuffs. This time it may decide to go further and ban imports of clothing and used cars.
The new EU measures forbid EU companies from engaging in new contracts in oil drilling, exploration and related services in Russia’s Arctic, deep sea and shale oil projects.
Following on from the EU’s sanctions announcement the USA followed suit. The new measures will affect upon Russian banks, defence and energy firms. The sanctions were announced despite a ceasefire being in effect between Ukrainian government forces and pro-Russian separatist rebels.
“Given Russia’s direct military intervention and blatant efforts to destabilise Ukraine, we have deepened our sanctions against Russia today, in concert with our European allies,” said US Treasury Secretary Jacob Lew. “These steps underscore the continued resolve of the international community against Russia’s aggression.”
The Russian Ruble saw little movement after the nation’s Central Bank choose to leave interest rates unchanged at 8.0%.
Pound Sterling to Russian Ruble Exchange Rate Forecast
With the outcome of the September 18 Scottish referendum in doubt, we can expect the Pound to remain highly volatile as the vote draws closer. With the newly announced measures against Russia, we can expect the GBP/RUB exchange rate to remain higher.
That could change however if any opinion polls released over the weekend and next week show a lead for the pro Independence yes campaign. Markets are growing increasingly concerned over the potential impacts of a yes vote with some economists saying that the Pound could be devalued by as much as 10%.
