The Moscow Exchange showed a slight pullback in the dollar and euro after an morning surge. By 11:32 Moscow time, the dollar stood at 99.45 rubles and the euro at 104.4 rubles.
Why did the ruble weaken?
Sovcombank’s lead analyst, Mikhail Vasiliev, noted that the ruble’s decline followed the end of the September tax period on the 28th. Exporters sold foreign currency to meet budget needs, keeping supply high, but by late October that support had faded, he said. From a broader economic view, the ruble has been softening over the past ten months. Vasiliev explained that even with strong oil prices, export inflows are not sufficient to cover demand for imports, capital outflows, and activities by foreign entities in Russia.
He added that the shift to ruble payments for export and import flows reduced the country’s foreign currency income. At the Eastern Economic Forum, President Vladimir Putin spoke of a limited return of foreign earnings from major exporters. Officials are expected to press business to boost currency supply to steady the ruble, while avoiding aggressive currency controls that could disrupt business amid Western sanctions.
Negative pressures on the ruble include geopolitical and budget risks, rising inflation, and the ban on exporting gasoline and diesel. The oil products ban reduces foreign earnings and foreign currency supply. Vasiliev estimated that gasoline and diesel exports could total about $12 billion in the October–December period, roughly matching the current account surplus forecast for the same quarter. He warned that the ban could tighten foreign currency availability and press the ruble lower.
BCS World of Investments analyst Mikhail Zeltser, a stock exchange expert, added that speculation also weighs on the ruble. To stabilize the rate, Vasiliev proposed increasing foreign currency supply from exporters and dampening demand from capital outflows, with careful adjustments in export earnings flows and exchange controls to avoid hindering business under sanctions.
The monetary backdrop provides some support for the ruble. Inflation running above 5.8 percent has nudged expectations toward a key rate rise at the Bank of Russia meeting on October 27, with markets pricing in at least a one-point hike to 14 percent. Higher rates tend to attract ruble deposits, strengthening savings returns in rubles, according to Vasiliev.
Oil prices staying high, yuan sales totaling 0.8 billion rubles daily from reserves, and new export taxes effective October 1 also bolster the ruble. The Finance Ministry noted Russian oil averaged over $83 per barrel in September, up from the $50–60 range seen earlier in the year. Vasiliev suggested that export tax changes could add roughly $0.7 billion of foreign currency into the market each month via the exchange channel.
Where will the ruble stand in October?
Vasiliev warned that the ruble’s weakness could persist into October unless new policy steps are taken to steady it. He forecast dollar prices in the 97–102 ruble range, euros at 102–107 rubles, and yuan near 13.3–13.9 rubles in October.
Zeltser cautioned that currency bases can diverge, and volatility may produce sharp moves. He recalled August’s swing from around 102 to 92 rubles per dollar and suggested a possible return to the 100-ruble area with a late-autumn recovery toward 90 rubles per dollar and 95 per euro.
In a baseline scenario, Vasiliev expected officials to tighten verbal support measures for the ruble in the coming days. If the ruble weakens more sharply and the dollar tops 100 rubles, additional steps previously announced could be deployed, such as restoring mandatory sales of exporters’ earnings, curbing capital outflows and foreign-currency payments, and potentially raising policy rates to 15–17 percent. Other options include widening yuan sales from reserves, banning share buybacks by Russian companies from non-residents, and slowing the exodus of foreign firms from Russia.
Until a consensus emerges between the Ministry of Finance and the Bank of Russia on currency controls and export proceeds, the ruble is likely to remain volatile and could test the 100–105 ruble band in the near term. A respected analyst from the Russian University of Economics, GV Plekhanov, noted that a higher rate is unlikely to stabilize the ruble by itself, stressing a need for a thoughtful, consistent domestic-market policy aligned with currency stability.
In the base scenario, Vasiliev expected a trading range of 90–100 rubles per dollar through year-end. For Q4, he projected averages of about 98 rubles per dollar, 103 rubles per euro, and 13.4 rubles per yuan. He emphasized that an average ruble-dollar rate near 100 rubles is part of their 2024 forecast, though risks lean toward a softer ruble.
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