In the opening months of 2024, the ruble is expected to keep fluctuating against major currencies within broad corridors. Analysts anticipate ranges around 88 to 95 for the dollar, 97 to 105 for the euro, and 12.25 to 13.25 for the yuan, with such movements playing out against a backdrop of ongoing volatility. This assessment comes from independent financial analyst Konstantin Tserazov, who spoke with socialbites.ca in a recent discussion.
“Rates are likely to remain highly volatile in the near term and are unlikely to break out of the established channels,” the expert noted. He added that the currency may drift within these corridors unless key policy actions shift the balance, underscoring the sensitivity of the ruble to regulatory decisions and global financial conditions.
Looking ahead, Tserazov warned that if the decision to extend the mandate for the mandatory sale of foreign currency earnings by Russian exporters does not come through in April, a fresh wave of ruble depreciation could begin in the second quarter. The permanence or expiration of such measures has long been a driver of market expectations, and the April decision remains a pivotal fulcrum for the currency’s trajectory.
During December, Russian President Vladimir Putin reiterated that the decree’s measures were temporary in nature. In a scenario where those temporary rules lapse, the ruble could face renewed pressure, with projections suggesting the dollar/ruble rate might reach around 115 in the second or third quarter of 2024. In such a case, the euro and yuan could also exhibit more pronounced gains, given broader global currency dynamics.
“Without a mandatory sale of foreign currency by exporters, the ruble could weaken more sharply,” Tserazov cautioned, highlighting the potential upside for import-driven inflation and a widening current account gap should policy tapering coincide with sustained external demand for Russian goods.
Over the past two years, the ruble has experienced two notable cycles of rapid strengthening: one beginning in March 2022 and another starting in October 2023. In each instance, authorities implemented measures aimed at stabilizing the currency and supporting financial stability, signaling the government’s willingness to intervene when needed to ease volatility.
The currency’s behavior over this period has also been shaped by capital movement constraints and the evolving balance of trade. With free capital movement limited, the ruble’s value has largely mirrored shifts in Russia’s trade balance. Import activity has recovered to pre-crisis levels, while exports have regained momentum toward normal volumes, contributing to a more balanced external position overall.
If the decree is allowed to lapse and imports maintain their current pace, a weakening trend for the ruble could gain traction. Elevated budget expenditures and the country’s reliance on imports are likely to continue exerting pressure, particularly if external conditions remain unsettled or commodity prices swing unfavorably.
To prevent a renewed slide in the ruble, Tserazov suggests that either additional measures enforcing the sale of foreign currency or the implementation of significant import restrictions could be required. Such policy tools would aim to support domestic liquidity conditions and curb sharp fluctuations that could spill into consumer prices and business investment decisions.
Forecasts from currency strategists often hinge on a mix of macro factors, including fiscal policy, external demand, and central bank signaling. In the current environment, traders are weighing the potential impact of regulatory choices and the pace at which imports and domestic demand adapt to evolving global financial conditions. The next policy milestones are expected to influence sentiment and set the tone for the ruble’s short- to mid-term path.
Market observers continue to monitor the balance of trade, capital controls, and the broader international backdrop, where movements in major currencies can amplify or dampen the ruble’s volatility. As the situation develops, traders and policymakers alike will be paying close attention to any shifts in import volumes, export earnings, and the strategic options available to stabilize the currency amid a changing global landscape. The path forward remains contingent on a combination of policy choices and the resilience of Russia’s real economy, with risk signals indicating potential periods of renewed stress or relief depending on how the story unfolds in the coming weeks and months.
Note: Figures and scenarios reflect expert analysis and remain subject to policy decisions and macroeconomic developments. All assessments consider the broader context of Russia’s trade dynamics, fiscal stance, and external market conditions, and are intended to provide a strategic view rather than a precise forecast.