Analysts covering last month's flash rally had at least three theories to explain why the currency's fortunes were suddenly turning positive.
The first was related to rumours of a huge central bank intervention to crackdown on currency traders who were shorting the rouble. The second was a likely rate hike by the Russian central bank that could stem huge foreign currency outflows from the country. And finally, there were whispers that Russia had struck a gas deal with the Ukraine government over winter gas supplies.
All of these predictions were right:
The Russian central bank spent over $15 billion of foreign exchange reserves in October defending the rouble. Moreover, on 29 October, the bank made a significant intervention by signalling that it would undertake $50 billion worth of currency repo auctions, whereby the central bank exchanges roubles for dollars at a fixed rate, to alleviate pressure on Russia's financial sector.
It then went even further with a 150 basis point interest rate hike on 31 October, a full 1% higher than the market had expected. This did briefly reverse the roubles trajectory - as the analysts had predicted. Unfortunately the rally lasted for just two minutes.
Even the confirmation of rumours that a gas deal had indeed been reached between Russia and Ukraine to keep gas supplies flowing through the winter proved insufficient to turn the tide for the Russian currency.
There's just one problem: One day after the sudden reversal, the rouble was all but wiped out and it has since continued to drop, hitting record new lows against the dollar and the euro on Wednesday.
Why?
The experts missed one very important thing in their analysis: oil.
With crude prices continuing to slide, Russia has confirmed once again that its currency, and indeed its broader economy (oil and gas account for 10% of Russian GDP) remain hostage to the commodity.
Both Brent and WTI crude hit fresh lows on Wednesday suggesting that there may yet be more pain to come - especially as the Russian central bank has just announced that it may stop defending the currency as aggressively.
The chart below is the one that will be worrying Russian policymakers most right now. Russian companies have a huge amount of foreign-currency denominated debt due for repayment over the next few months. As the rouble slides, that bill is getting more and more expensive:
