Russia’s Ruble Waters: Exchange Rate Dynamics and High-Profile Projects
The Bank of Russia’s Vice-President, Alexei Zabotkin, explained that the ruble’s recent weakening against major currencies stems from Russia passing a trough in export earnings. He suggested that the exchange rate trajectory is likely to slow its decline and show softer dynamics as conditions adjust.
He noted that export revenues typically follow the scale and price of sales with a delay, as payments arrive up to three months after shipment. In February, after oil price caps, export receipts began to rebound, signaling a potential improvement in the overall revenue picture. Zabotkin highlighted that the current export earnings flow reflects price and volume conditions for oil and gas in late December and early January, and he also recalled that imports have been rising in response to the restoration of production chains.
Historically, the ruble’s value has varied with trading conditions. The minimum ruble value against the dollar in 2023 was 67.1, while the dollar’s peak on the Moscow Exchange came on April 7 at 83.5. In the trading week of April 3–7, the ruble experienced a jump of 3.53 rubles against the dollar, and the euro crossed the 90 ruble mark in the preceding week, marking the strongest levels since April 2022 for European and US currencies.
During a press briefing, Finance Minister Anton Siluanov attributed ruble fluctuations to foreign exchange inflows and outflows. He explained that changes in the exchange rate arise from shifts in imports and export earnings, with the rate moving in both directions in recent months. He added that the central bank follows market principles, and the ruble remains subject to external economic conditions as markets respond to evolving data.
In addressing potential future values, the minister stated that the central bank does not impose fixed limits at present. He pointed out that recent increases in Russian energy prices are likely to attract more foreign currency, which could support a strengthening ruble in time.
Shell, Sakhalin-2, and a Substantial Transfer
Reports from early April indicated that NOVATEK received government approval to pay 94.8 billion rubles to Shell for its stake in the Sakhalin-2 project, with funds to be transferred from Russia. The coverage suggested that authorities might scrutinize Sakhalin-2, potentially adjusting the payment in line with any detected damages. NOVATEK, however, argued that any identified damage would be offset by dividends that Shell had not fully collected from its 2021 participation in Sakhalin-2.
Sakhalin-2, a joint venture aimed at developing the Piltun-Astokhskoye and Lunskoye fields, has operated since 1994 under a production-sharing framework. Initial shareholders included Gazprom (50%), Mitsui (12.5%), Mitsubishi (10%), and Shell (27.5%). The operator posted a net profit of about $4 billion and revenues near $9.6 billion in 2022. Analysts at Bloomberg have attributed the possible sale of Shell’s stake to the ruble’s weakness, though there is no consensus linking the currency’s move to Sakhalin-2’s structure or performance. Citations reflect market commentary from Bloomberg and other sources without asserting a direct cause-and-effect relationship between the ruble and Sakhalin-2 changes.
Neither the Kremlin nor Shell provided comment on a potential deal. A spokesperson stated that business correspondence is not routinely discussed publicly. In mid-April, a deputy finance minister noted that the government imposes strict controls on the foreign exchange rate of companies, and any breaches could trigger a response from the Bank of Russia. He remarked that the logic linking Shell’s exit from Russian assets to a ruble jump is not unanimously accepted. The central bank’s stance on the matter remains cautious, with officials emphasizing that market dynamics and regulatory measures shape currency movements.
Ultimately, the conversation centers on how external conditions, corporate settlements, and fiscal policy interact to influence the ruble. Analysts emphasize that exchange rates respond to a mix of export earnings trajectories, import activity, and the evolving balance of payments. The outcome depends on a confluence of price signals, trade volumes, and policy signals from Moscow and international markets. This synthesis continues to drive debate about the currency’s near- and medium-term path, as well as the resilience of Russia’s energy sector in shaping financial markets. Citations: market analyses and official comments from governmental and corporate entities provide context but do not imply formal forecasts.—[Cited sources: Bloomberg market commentary; public statements from Russian officials, reported contemporaneously]