The rouble real effective exchange rate appreciated 0.8% MoM in October, strengthening from a decline of 0.4% MoM in September and bringing the YTD change to +3.9% (from +3.1% in January-September). The rouble strengthened 1.4% MoM against USD (+3.9% YTD) and 0.6% MoM against EUR (+6.3% YTD) in real terms.
RUB REER appreciation in October was a combination of the nominal rouble strengthening during the month (1.4% MoM against USD and 0.3% MoM against EUR, according to official average rates) and higher inflation than in the Eurozone (0.5% MoM, compared with around 0.2% MoM). Since January 2008, RUB REER has gained 13.9%. We suggest that the typical acceleration in consumer prices growth during the last months of the year might help REER in the coming months and balance further RUB weakness.