Looking at Mintos Loans in Roubles, it is immediately clear there are nice interest rates. Examples:
- EcoFinance (rating B), 19.5%, 60 days term
- Kviku (rating B), 19.1%, 12 months term
- Dozarplati (rating B-), 19.0%, 12 months term
- Mikro Kapital (rating A-), 18.0%, 24 months
It is quite feasible to get an average interest rate around 19% from this, which can be compared to what is currently possible in Euro loans, which is around 15.5%. So currently the difference is 3.5% in favor of Rouble loans.
Is this a good compensation for taking on the currency risk?
Behold the high mountains and low valleys of the Rouble to Euro exchange rate:
Since 2013 the Rouble has lost about 40% of its value to the Euro. The value of the 3.5% extra yield is just
So 23% being far less than the lost 40% this seems like a bad compensation for the currency risk But that is if the Rouble continues to fall.
Looking at the period before 2013, the Rouble was relatively flat.
Russian inflation is generally trending down:
To sum up, I choose to invest an 8% portion of the portfolio in Roubles short term because I speculate:
- Russian inflation will not rise (as world inflation is generally down)
- The oil price will gradually rise, supporting the Rouble
The future is not possible to predict but this is how I place my bet.