Ruble to begin to fall without further state support

09:00, 07.02.2024

The two-week period of strengthening of the ruble against the dollar and the euro is over. On February 1, the American currency overcame the psychological mark of 90 rubles. The next day, the dollar continued to rise in price, for the first time since January 16, reaching the level of 91.065 rubles at the moment. By the end of the trading day, there was a slight correction on the Moscow Stock Exchange, but the dollar held at 91.05 rubles. It rose in price by 1.31 rubles in a week. It is noteworthy that the euro, on the contrary, declined last Thursday. But on Friday, it found the strength to fight and went up — 98.29 rubles (+36 cents to the results of previous trades and +87 cents for the week).

A “helping hand” for the ruble

Financial analysts interviewed by Realnoe Vremya assess the potential of the ruble in different ways, but they agree that without maintaining currency control, the Russian national currency cannot withstand alone.

“The dynamics of the ruble is related to both internal and external factors. There is an external discrepancy between the exchange rates with the dollar and the euro — it's just that the global dollar strengthened against the euro due to the Fed's indecision to quickly reduce its key rate, so on the Moscow Exchange, the euro looks weaker than the American against the ruble. Regarding the internal factors of the national currency exchange rate, the Central Bank's strict monetary policy and standards for the repatriation of exporters' earnings are in effect. There is also a budget rule, but the tax period is over, and the ruble has slightly fallen," says Mikhail Zeltser, an expert on the stock market at BCS World of Investments.

In his opinion, there is no question of any devaluation.

“Just two weeks ago, the ruble updated 6-month highs, and the dollar, euro and yuan collapsed to the lows of the end of June 2023. Therefore, a dollar jump above 90 is not scary, and this is nothing more than stock market volatility. At any moment, it may be below the bar again. And the factors of the Central Bank's monetary policy and regulations are unlikely to reduce their support for the national currency until the end of spring," says Zeltser.

According to his forecasts, in the coming months, the RUB/USD pair rate will be in the 88-90 corridor for $1.

Yury Kravchenko, the head of the analysis department of banks and money market at VELES Capital IC, also sees no serious grounds for a sharp jump in the exchange rate of the US currency. He estimates the possibilities of the Russian national currency even higher than Zeltzer.

“Even if, at current levels, the factor of mandatory currency sales is no longer a driver for a significant strengthening of the ruble, the measure will help the Russian currency maintain its position during the beginning of the month, when the market supply of currency and liquidity decline. Taking into account the possibility of keeping the decree in force until the end of this year, the ruble, supported by other factors (the sale of the Central Bank's currency, a high key rate), retains chances to strengthen in the near future towards 85 against the dollar and consolidate in the medium term in the range of 85-90 rubles," the expert forecasts.

Alexander Potavin from Finam, in turn, does not exclude that by the end of the year the American currency will overcome the bar of 100 rubles.

Indefinite sale

“It remains to be seen what decision the Kremlin will make regarding the extension of currency control over Russian exporters in the next month and a half. The situation with the ruble exchange rate until the end of 2024 will largely depend on this. It is possible that, having begun to impose restrictions, the authorities will not find the strength to abandon them. The requirement for mandatory repatriation and sale of foreign currency earnings by the largest exporters, introduced before the end of April, may not just be extended, but will become indefinite," the analyst believes.

According to his data, in the last months of last year, Russia's foreign trade was weak, with a surplus of less than $10 billion per month.

“This may not be enough to compensate for the main items of currency outflow from the country: foreign tourism, repayment of foreign debt, demand for foreign assets. The expected reduction in the sale of currency from the Russian National Wealth Fund after February 6 may again increase pressure on the ruble. Currency sales from the NWF should slow down by the end of the first quarter and then almost completely stop. Therefore, we expect the dollar to rise above 100 rubles by the end of this year," Potavin states.

Galiya Shakirova