Speculation is also rising that Russia will again intervene in the foreign currency market to stem the ruble’s slide, but currency interventions often prove ineffective for any substantial period of time. Additionally, the ruble and Russia ETFs have continued slumping even after the Russian central bank raised interest rates by 100 basis points last week. Over the past week, RSX has plunged 17.4%.
Russia depends on oil revenue for about half of government receipts, the largest percentage of any major non-OPEC producers, which highlights the vulnerability of the ruble and Russian equities to sliding oil prices. Last week alone, the ruble plunged 10%. The United States Brent Oil Fund (NYSEArca: BNO) is off 7.3% over the past week.
Expectations for a near-term rebound in Russian stocks are hard to come by. In fact, some traders are betting more losses are in store. As was reported last Friday, options traders were spotted gobbling up RSX January $12 puts when the ETF was trading over $16. Today, the ETF trades just over $14.20 and at its lowest levels since the first quarter of 2009. [Options Traders See More Declines for Russia ETFs]
Market Vectors Russia ETF
