Russia: a brief market watch

RUSSIA ECONOMICS - In Brief 22 Jan 2026 by Evgeny Gavrilenkov

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The FX market remains stable despite external turbulence. Some fluctuations were observed during the extended national holiday period earlier this month, when the USD/RUB moved to 80 level amid poor liquidity. However, when all the major players were back after holidays, the ruble appreciated again to 77-78 range. Trading activity remains moderate and there are high chances that volatility (which dropped to single digit levels in the middle of January) will stay low. However, a combination of a too strong ruble and discounted rate oil prices creates problems for the federal budget. As oil&gas revenues will likely be below the target once again, it may spark discussions about the need to adjust the cut-off oil price for the fiscal rule. January’s inflation prints appeared disappointing for fixed income investors. The bulk of them revised their expectations (probability, based on tradable derivatives) of the key rate cut in February from about 60% to 30%. The latter pushed OFZs yields up to 14.7%, and the 10Y papers added about 20 bps in comparison to the yields seen at the end of 2025. The demand on OFZ’s primary placements was also moderate, and Minfin managed to raise only RUB102 bln in two auction days this year, while the quarterly plan targets R1.2 trln. In our view the CBR still remains undecided about the rate and its action will depend on inflation weekly statistics to be published in the next few weeks. Even if the regulator decides to stay on hold in February, the overall trend for the softening of the monetary policy will likely persist. If so, then OFZ yields could look attractive for both institutional and retail investors. On January 19, the MTD inflation ...