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16 Sep 2015
Fed hike will result in Russian casualty – Swissquote
FXStreet (Delhi) – Yann Quelenn, Market Analyst at Swissquote, suggests that in case of a U.S. rate hike, Russia could be a casualty, caught in the crossfire of a stronger greenback.
Key Quotes
“A stronger dollar would serve to push Russia's international reserves down, (currently at $364 billion). In addition, Russia relies mainly on its oil and gas exports and its revenues are suffering from low commodity prices.”
“Also, most commodities, which are priced in dollars, will become increasingly expensive for other countries which will have a downside effect on Russia’s revenues.”
“Since the beginning of the year, Russian GDP shrank by 2.2%y/y in the first quarter and by 4.6%y/y in the second quarter. Despite potential Fed rates hike being negative for Russia, it is also worth saying that Russia has been trying to improve its relationship with China and is also trying to give up the dollar in its international exchanges.”
Key Quotes
“A stronger dollar would serve to push Russia's international reserves down, (currently at $364 billion). In addition, Russia relies mainly on its oil and gas exports and its revenues are suffering from low commodity prices.”
“Also, most commodities, which are priced in dollars, will become increasingly expensive for other countries which will have a downside effect on Russia’s revenues.”
“Since the beginning of the year, Russian GDP shrank by 2.2%y/y in the first quarter and by 4.6%y/y in the second quarter. Despite potential Fed rates hike being negative for Russia, it is also worth saying that Russia has been trying to improve its relationship with China and is also trying to give up the dollar in its international exchanges.”