Russia proved to be very savvy investor during the corona crisis, it has managed to somehow turn a profit and is now seen as a bit of a safe-haven for people investing in developing markets. This comes down to two factors; oil’s continued upward trend and the CBR boosting the country’s hard currency reserves. Oil has retraced 50% of its losses and now trades around $38/barrel. Russia’s oil businesses are slowly becoming financially viable again which means the Russian ruble and bonds, which reflect the price of oil, are seeing a lot of demand as they will provide almost certain upside as oil rises. Investors buying Russians assets(bonds, fx) gives the country money to invest in itself.
Russia outperformed other Emerging Market countries buy boosting its hard-currency reserves by $60Bn to $560Bn over the past 6 months. This is great because whilst other countries were running down their reserves to boost their economy through stimulus packages Russia stayed cautious. Although Russia also injected capital into their local markets, the CBR saw it as an opportunity to boost their reserves by buying other countries’ currencies whilst they were cheap with the aim of selling them into the market as economies normalize and their values begin to increase.
Moral of the story: don’t follow the crowd.