The ruble could gain strength against the dollar ahead of the central bank initiating foreign exchange purchases under the budget rule, according to Evgeny Mironyuk, a stockbroker with the financial holding BCS Mir Investments, in an interview with socialbites.ca.
Following the Moscow Stock Exchange’s holiday, the dollar dipped by nearly 3 percent, landing at 69.99 rubles per dollar at 12:35 Moscow time.
Mironyuk explained that under the central bank’s budget rule, the ruble will move within a floating band until FX purchases begin to support the Finance Ministry. He suggested a possible move to under 70 rubles per dollar as a transitional step and noted the potential to test a local peak for the USD/RUB pair around 72.91 rubles per dollar. There is no fixed date for the central bank’s currency purchases yet, but the most common expectation is that the regulator will start in the near term, potentially early this year.
He predicted that the ruble’s trajectory at the start of the year would show more pronounced movement than in the closer months of the previous year.
“The opening session on January 9, when most market participants resumed trading, indicated that the ruble will oscillate against the dollar, the euro and the yuan. Volatility is likely to be higher than in the late summer to fall period of last year. Market momentum and the balance of payments will be key drivers for participants. Leading indicators include the Brent-Urals spread, which held around mid-to-high thirties while Brent prices remained comparatively stable, along with data on energy export trends,” he noted.
Earlier, Russian Deputy Prime Minister Alexander Novak indicated that gas exports would fall by roughly a quarter by year’s end, while Bloomberg reported a doubling of seaborne oil exports, a trend linked in part to weather patterns and seasonal demand. The publication of the central bank’s assessment of the January-December balance of payments would either reinforce or challenge that trend, Mironyuk added, and such an update would act as a significant driver for the ruble’s future path.
In summary, market participants are watching the balance of payments, energy exports, and spread dynamics between Brent and Urals as crucial indicators. The coming weeks are expected to reveal how the ruble behaves within the evolving framework of monetary policy and FX interventions, with analysts keeping a close eye on any official signals about the timing and scale of currency purchases and their impact on volatility.