Russia: a brief market watch

RUSSIA ECONOMICS - In Brief 19 Mar 2026 by Evgeny Gavrilenkov

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Minfin’s decision to pause fiscal rule operations on the FX market has clearly impacted the ruble, with USD/RUB climbing from 77.2 in early March to around 84-85 recently. This might seem odd given the surge in oil prices, with Urals now above $90/bbl and Brent topping $110/bbl after more than five days over $100/bbl. The drop in government FX interventions only partly explains this. Exporters typically get paid and sell their FX earnings domestically with a 1.5-2 month delay, so the recent oil windfall will likely hit the FX market in the second half of April at the earliest. Still, that may not lead to a stronger ruble, especially as the mandatory FX sale rate is currently 0%, leaving exporters free to hold their earnings—particularly if oil prices fall by then, stoking devaluation fears. Adding to this, Minfin may cut the fiscal rule’s oil price threshold from $59/bbl to $45-55/bbl, meaning the government could start buying FX as soon as April. With uncertainty in the Middle East, FX market volatility may persist, and USD/RUB could stay in the 82-85 range in the coming weeks. The OFZ market was in a positive mood after Minfin’s announcement regarding its willingness to cut “non-protected” expenditure items by 10% in 2026. According to preliminary estimations, it may translate into an R1 trln cut in federal budget expenditures. The latter was treated as a reasonable compromise between the government and the CBR amid the potential revision of the fiscal rule. The market expects the regulator to cut the key rate by 50 bps this Friday amid dovish comments. Strong performance of energy prices makes investors more constructive regarding the potential widening of the budge...