The Russian ruble extended its weakness against the US dollar and the euro in the second-last trading session of 2021. The ruble, which has fallen noticeably over the last year, is focusing on economic data and the upcoming meeting between President Vladimir Putin and President Joe Biden. Can the ruble recover next year?
According to the Federal State Statistics Service (FSSS), the annual inflation rate surged 8.39% in December, slightly higher than the market forecast of 8.1%. On a month-over-month basis, the consumer price index (CPI) rose 0.82% in December, down from the 0.96% boost in the previous month.
The country continues to experienced skyrocketing food prices, and policymakers are concerned that they could advance considerably if consumers go on a buying spree anticipating even greater inflation next year.
In other economic data, the IHS Markit manufacturing purchasing managers’ index (PMI) dipped to 51.6 in December, down from 51.7 in November – anything above 50 indicates expansion. The composite PMI swelled to 50.2, while the services PMI climbed to 49.5.
The monthly gross domestic product (GDP) jumped at an annualized rate of 5.2% in November, up from 4.8% in October.
Retail sales increased 3.1% year-over-year in November, falling short of the 3.9% median estimate. Business confidence also worsened this month, falling to -3.3. Real wage growth edged up 0.6% year-over-year in October, below the market estimate of 1%.
The White House will be hosting a call with President Putin to establish a diplomatic path with Russia over Ukraine. Moscow has reportedly moved approximately 100,000 soldiers to the Russia-Ukraine border as Putin has demanded security concerns in Eastern Europe. Biden wants “de-escalation rather than escalation.”
This comes before US and Russian officials are scheduled to hold talks on January 10 in Geneva.
The Russian ruble has lost about 1% against the greenback this year.
The USD/RUB currency pair climbed 1.01% to 74.7058, from an opening of 73.9604, at 13:28 GMT on Thursday. The EUR/RUB ballooned 0.75% to 84.57, from an opening of 83.95.