Russia’s ruble-denominated MICEX Index on November 23 reached a post-2008 crisis high, hitting 1865 points for the first time in seven years. The intraday high reflects a widespread improvement in the Russian investment story, which was hammered in the global financial crisis, then again by the plunge at the end of 2014 in the oil price and ruble.
According to Charles Robertson, chief economist at investment bank Renaissance Capital, this recovery speaks to a change in the narrative for Russia in 2015, from one of an economy close to implosion to one with “a ruble float that will secure the current account surplus and allow Russia to pay its debts”.
“These factors took away the deep downside risk seen in late 2014 when investors were running from Russia. Today, the ruble is one of the few cheap currencies in EM where you also find a current account surplus. This helps a lot,” he added.
The rise in the MICEX comes amid murmurs of rapprochement between Russia and the West in light of the ongoing battle against the Islamic State (IS) in Syria and northern Iraq.
Russia’s economy has been struggling for over 18 months as a result of low oil prices and continued Western sanctions against Moscow.