Two headline events are causing a tumultuous push and pull effect on the Russian ruble (RUS) this week. First and foremost is the rumor that Prime Minister Vladimir Putin may run for president in next year's election. Investors have begun to buy up the RUS as a response to the potential run by the sitting PM, citing future strength and continuity as a cause for purchasing domestic assets in Russia.
According to the Russian central bank, an approximate $21.3B net outflow left the country in the first quarter due to uncertainties surrounding the upcoming elections, followed by another exit of $9.9B in Q2. The stability Putin brings to the election circuit has helped stifle much of this revenue outflow, supporting the stability of the RUS despite Putin's opposition to parts of the West's global agenda.
The second factor pulling on RUS values is a lowering in price of oil due to recent warnings about ratings downgrades. Moody's Investors Service hinted that US debt may receive a ratings downgrade should indecision result from the debates taking place in Congress over a lifting of the debt ceiling.
The impact has been a decline in oil values from over $100 a barrel to a current price near $93, which is weighing on the ruble in this week's trading. The RUS still appears to be inching higher against its primary euro-dollar currency basket, but dips caused by lower oil prices may slow this growth and generate temporary downturns.