The ruble will be able to stay at less than 90 per dollar in the first quarter, according to experts interviewed by Izvestia. In the first working days of January, the rate stopped below this psychologically important mark. The reasons are the sale of currency by the Central Bank according to the budget rule, the requirement for exporters to compulsorily sell proceeds in foreign monetary units, and also the tax period. Economists expect that the ruble will continue to improve its position, and in a positive scenario, the rate could drop to 83 per dollar.
Why did the ruble strengthen against the dollar?
In the first working days of January, the dollar consolidated below the psychologically important mark of 90 rubles. By 18:00 on January 10, the “American” was trading at 89.4. The euro also weakened against the Russian currency and fell below 98 rubles – this is the minimum since mid-December 2023.
The beginning of the strengthening of the ruble was facilitated by the Bank of Russia’s statement on operations with funds from the National Welfare Fund in 2024, said Nikolai Dudchenko, an analyst at Finam Financial Group. This means that the National Welfare Fund will accumulate reserves by purchasing foreign currency, and the Central Bank will return its volumes back to the market.
The regulator emphasized that, within the framework of the budget rule, it will sell foreign money worth 11.8 billion rubles per day. Thanks to this, more foreign currency will enter the market, which will support the exchange rate. After this news, the ruble strengthened from 91 to 89.36 per dollar, the expert recalled.
“This is quite a significant volume for the foreign exchange market,” said Daniil Bolotskikh, leading analyst at Digital Broker.
Only thanks to the actions of the Central Bank can the ruble strengthen to 86 per US dollar, the expert emphasized.
The main support is provided by monetary and regulatory factors, explained investment strategist at BCS World of Investments Alexander Bakhtin. After the holiday break, exporters returned to the market, who still must sell the majority of their proceeds in accordance with the presidential decree of October 11, 2023.
“The extremely low liquidity of the market during the holidays did not allow companies to carry out large transactions, and now that liquidity has returned, they have probably resumed selling foreign currency earnings,” explained economist Konstantin Tserazov.
In addition, the more stable position of the ruble is due to the high key rate, which is likely to remain at its level (16%) at least in the first quarter, added Tatyana Simonova, portfolio manager for Russian shares at General Invest. This will reduce the growth rate of lending, increase the population’s propensity to save money and reduce the demand for foreign money in the Russian Federation, which will support the national currency.
Photo: IZVESTIA/Sergey Lantyukhov
In the third decade of January, the ruble will receive special support from the tax period, recalled Freedom Finance Global leading analyst Natalya Milchakova. Until January 28, large businesses will have to pay excess profit tax. Among these companies there are many exporters – in order to pay off with the state, they will have to transfer part of their assets into rubles, which will additionally support the demand for the national currency. Therefore, it will strengthen throughout January, and by the end of the quarter the rate may reach 83 per dollar, predicted Natalya Milchakova.
Alexander Bakhtin also shares a positive opinion. According to him, before the beginning of spring the ruble is able to gain a foothold in the range of 85-90 per dollar.
How long will a dollar cost less than 90 rubles?
The ruble fixed at below 90 per “American” in the last days before the New Year holidays. At the same time, the rollback to 92 per dollar on the first trading day on January 3 occurred against the backdrop of low trading volumes and the absence of a news background, clarified Nikolai Dudchenko from Finam. Most likely, the movement was purely speculative in nature, because in the future the national currency continued to gradually strengthen.
In general, a level below 90 per dollar can be considered comfortable for the market, noted Alexander Shneiderman, head of the sales and customer support department at Alfa-Forex. This rate can last for several months, fluctuating in the range of 87-91 per “American,” the expert believes.
Photo: IZVESTIA/Pavel Volkov
“The ruble may be around today’s levels at least in the first quarter of 2024, provided that we do not see an exacerbation of geopolitical risks or a serious increase in oil prices during this period,” noted Tatyana Simonova from General Invest.
At 89.3 rubles per dollar there is a “support level” for this currency pair, after which market participants will be less willing to buy it at a higher rate, added Nikolai Dudchenko. After this, the national currency may begin to move towards the level of 87.8 for the “American”.
The experience of recent months shows that the main driver of the strengthening of the ruble is the obligation of Russian exporters to sell foreign currency earnings, says economist Konstantin Tserazov. The measure is capable of maintaining the exchange rate of the national currency against the dollar in the range of 85-95, but Russian President Vladimir Putin in December indicated its temporary nature.
The requirement expires in April – after which the ruble may resume its decline and rise above 100 per dollar in the second quarter, the expert believes. Valery Tumin, director of Russian and CIS markets at fam Properties, agrees with this: according to him, as summer approaches the strengthening of the ruble, the trend for the ruble will lose strength, and foreign currencies will begin to grow.
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