The Russian ruble tumbled below its historical lows. The exchange rate hit another all-time trough of 37.02 rubles per dollar. The anti-record was set amid the escalation of geopolitical conflict in Eastern Europe and new sanctions against Russia's public companies. The situation developed on a standard scenario. In the beginning the market responded to the events with a rapid slump of the ruble, but later it retreated upwards slightly and consolidated at the level of 36.90. At the same time, the exchange rate of the ruble/euro pair fell to 48.75 rubles per euro. Analysts say there is no treat of collapse here. The pair reached a historical low of 51.2 rubles this spring. Further speculations on possible western sanctions against Moscow continue exerting pressure on the Russian ruble. As long as Ukraine remains an area of tension, the risks of further decline persist. Besides geopolitical instability, the ECB's officials’ decisions on the monetary policy are considered another major factor. The latest inflation report signaled a need to take additional measures to strengthen inflationary pressure. When consumer prices rise below forecasts, speculators will go short selling the euro on Forex. Experts are confident such a dynamic will affect the quotes in the Russian currency market. In theory, exchange rates depend on macroeconomic indicators such as current account balance, inflation, key interest rates of central banks, and others. However, in fact, large market participants determine major trends on financial markets, on the futures and options market in particular. Futures and options on USD/RUB, the most actively traded pair on the Moscow exchange, expire in mid-September.
