The Russian rouble suffered a loud fall on Tuesday, losing more than 10% against the Dollar and Euro on the MOEX.

The USDRUB was at one point above 62.3, although it was still a hair away from 50 as recently as last Wednesday. While the government, business and the Central Bank have been complaining about strengthening the rubble for weeks, it was only last week that they found some pain points, which caused the Russian currency to reverse.

Firstly, the government and the Central Bank have been more openly and unequivocally telling the rouble where it should go, calling acceptable levels near 70, but not 50 per Dollar.

Secondly, the Bank of Russia was lowering rates and relaxing currency controls. Reports of the possibility of withdrawing up to $1m a month to unfriendly countries revived the rubble sellers in the market.

Thirdly, the bitter dividend disappointment by investors, most notably from Gazprom. It is far from the only one to have cancelled dividends on the Russian market, but by a wide margin, it is the biggest; in addition, its board of directors approved a record dividend in May, but the government (the main shareholder) preferred to take its own, raising the MET for last year retroactively.

Fourthly, the traditional high season for the balance of payments was over, and this was unfortunate enough to overlap with the fall in oil prices. The latter trend showed more signs of breaking the upward trend, having turned into a correction.

Fifthly, the overbought technical rubble has reached extremes, which previously almost unmistakably predicted a reversal. Under the above factors’ overhang, impressive pressure formed, and many speculators rushed to the exit.

Among the potential targets for the current rise, 75 is worth looking at. This is the level of 73.4% of the amplitude of the decline from 140 to 50. It is also the equilibrium level for most of 2020 and 2021.

However, given the adverse economic backdrop and potential sales and energy price problems due to the global slowdown on top of sanctions, a level of 85 per Dollar at the end of the year looks reasonable.