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JPMorgan: the ruble is undervalued by 10%, it makes no sense to sell

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“We would not open ‘shorts’ in the ruble,” given the undervaluation of the exchange rate by 10%, strong balance of payments and a favorable outlook for oil prices, according to the JPMorgan review.


“Given the increased geopolitical tensions, which will continue to put pressure on the price of local assets, and the risks of reduction of long positions of large investors, we maintain our position“ at the market level ”in Russian assets,” analysts of the American investment bank write.

The new sanctions against Russia are “a symbolic step that opens the door to further, more severe restrictions on ruble-denominated debt.”


The direct effect of new sanctions on OFZs will mainly be limited by a decrease in market liquidity in the future. Since operations in the secondary market were not prohibited, the sanctions will not affect the position of the Russian Federation in the GBI-EM index, so there is no need to expect “forced” sales.

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The new sanctions will have an impact on foreign investments in assets in the Russian Federation in the medium term: investors will demand a large risk premium, and the positions of investors who do not use leverage (real money) in the ruble and OFZ are more likely to decline than rise.

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