Background
Russia has an economy that has in the past five years seen 70.25% of its exports by USD value accounted for by oil fuel exports. There is now a clear and present danger for the economy as the recent budget that was planned for next year was produced on the assumption of oil prices at $100 per barrel.
The problem lies in the fact that since the end of the second quarter of 2014 the price of crude oil has tumbled by some 23%. This has driven a sharp decline in the currency against the USDand is pushing the Central Bank of The Russian Federation (CBRF) closer to the point at which it will have to intervene.
The USDRUB rate closed the week at 40.7490. This is now getting too close for comfort to the level USDRUB 44.40; a trigger level or threshold that would prompt the CBRF to step into the market to acquire Rubles.
The CBRF did manage a successful intervention earlier this year as it brought the USDRUB rate down from 35.99 on April 28th to 33.69 by June 26. However, that better level coincided with the start of the decline in oil prices.
The CBRF acted to widen the currency’s trading band in back in August and stated then that it would have a preference for using monetary policy via interest rates rather than using reserves to control currency movements and thereby manage inflation which is currently running at 8%. That is the highest since August 2011. 
Source: www.investing.com, Spotlight Ideas
Government spending in Russia increased from RUB 1903.80 Billion in the fourth quarter of 2013 to RUB 1934.90 Billion in the first quarter of 2014. Government spending in Russia averaged RUB1779.11 Billion from 2003 until 2014. The first quarter of 2014 figure is an all-time high.
In the broader economy, business confidence in Russia decreased to -6 in September 2014 from -4 in August echoing the fall in capacity utilisation to 60.92 percent in July from 62.28 percent in June.
The market knows only too well that for the Russian Federation the peak cash outflow periods on the BBB rated sovereign debt is September and December. With a major squeeze being applied to Russia’s external earnings the market has every reason to test the CBRF resolve at USDRUB 44.40.
Management and risk
Parameters:
Entry: 40.749
Targets: 40.92, 42.61, 43.64, 44.40, 44.50
Stop: 38.21
Time horizon: Short term