Russia’s Invasion Of Ukraine; Interesting Commentary

Mar 11, 2022

Anchor Rand View: Russia’s Invasion Of Ukraine And Its Impact On The Rand And Bonds
By Neil Brown, Director – Anchor Financial Services

Figure 1: Rand Vs US Dollar
Source: Anchor
At the time we published The Navigator: Strategy and asset allocation report, 1Q22 on 16 January 2022, the rand was at R16.00/US$1. Our view, at the time, was that the rand would appreciate slightly against the greenback and probably hover just weaker than R15.00/US$1 for much of 1Q22. This view was based on the terms of trade remaining favourable and on a gradual, but protracted, rate-hiking cycle both in South Africa (SA) and in the US. Uncharacteristically, the rand behaved and did what we were expecting. A well-behaved currency made it unnecessary to update our rand views. However, with Russia’s invasion of Ukraine, much has changed. We have written about the minor trade and investment linkages between the local economy and the economies of Russia and Ukraine and the direct impact on SA is negligible (see our noted entitled Russia’s invasion of Ukraine: How will it impact the SA economy?, dated 8 March 2022). Instead, we are faced with impacts from other avenues which include…Click here to read the full article.
Russia’s invasion of Ukraine: How will it impact the SA economy?
By Casey Delport, Anchor Investment Analyst – Fixed IncomeAs we move further into March, Russia’s invasion of Ukraine continues to dominate headlines, with markets now starting to worry that the war will persist substantially longer than the quick conflict originally anticipated. A lengthy invasion will have more severe effects on global supply chains and commodity prices. Sanctions against Russia are deepening, with global discussions now on banning/limiting the import of Russian fuels. At the time of writing, the Brent crude oil price had spiked to c. US$128.7/bbl, with the risk of it now reaching US$150/bbl. Consequently, strategic oil reserves have been released into the markets to attempt to quell the price pressure. Overall, the response by largely Western nations has been substantial, coordinated, and committed but Russia remains unwavering in its ambitions for Ukraine. While global hope for a more peaceful resolution remains, it will not be easy (or necessarily quick) to attain, and markets are beginning to reflect this. Given the fluid nature of the conflict, at this point, it is almost impossible to accurately estimate the full global economic cost. Nonetheless, key macroeconomic, market and credit implications could come in the form of …Click here to read the full article
Until the next update, thanks for reading.
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