Russian 5 year Credit Default Swaps (CDS) has tightened below 300 points for the first time since November 2014, as sentiments and financial conditions have improved further.
- Russian Ruble is now hovering at 50 against dollar while country's central bank has gradually reduced interest rates to 12.5% from 17.5%. Investors have once again flocked back to country's debt.
- No resolution is yet on sight, however talks have resumed between Russia and Western counterparts. US secretary of State John Kerry visited Moscow for first time since annexation Crimea took place.
In spite of recent improvement, Russian business climate remains challenging according to survey conducted by Markiteconomics.
Ruble stands vulnerable to weakness in crude oil prices further. With Dollar rising once again expect weakness in Russian Ruble. From domestic points of view weakness in Russian Ruble would be welcoming as it will help Russian domestic budget, eliminating some effects of lower crude oil prices.


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