Ruble’s fall not to affect Azerbaijani manat

The recent fall of the Russian ruble will have no direct influence on the Azerbaijan’s national currency.

So far, the move has been small enough in the ruble to avoid direct implications for economies like Azerbaijan’s, particularly because the oil price remains high, John Hardy, Head of Forex Strategy at Saxo Bank, said in an interview with Azernews.

Also, Azerbaijan manages its exchange rate versus the U.S. dollar and hasn’t allowed it to move since early 2017, he noted.

“I would be surprised to see the ruble strengthen beyond 60 versus the U.S. dollar even if the threat of further sanctions fades from here,” Hardy said, commenting on the further development of situation on the Russian currency market.

After this recent episode and the risk of further geopolitical confrontations down the road, international money managers may be putting a discount on Russian assets that they will be slow to remove again, wanting to avoid the risk of future sanction moves, according to the expert.

“But without further sanctions or a sudden drop in oil prices, I would also say that the ruble is unlikely to weaken beyond the recent lows – so some kind of nervous 60-64 range may develop here, unlikely to affect the Azerbaijani manat,” he added.

The Russian currency continues to remain in an extremely unstable position. The danger in the form of another tough package of U.S. sanctions has temporarily passed, but the ruble is still heavily dependent on geopolitical news and investors’ mood.

Volatility on the Russian market has soared since Washington imposed new sanctions against Moscow on April 6, targeting major Russian companies and some of the country's businessmen.