At 11:40 Moscow time, data from the Moscow Exchange showed the dollar at 90.7225 rubles and the euro at 99.985 rubles in the session high.
Given current conditions, the ruble’s lower bound could be about 100 rubles per dollar and around 110 rubles per euro, according to Mikhail Vasiliev, chief analyst at Sovcombank.
He warned that a severe downturn in the global economy could occur if there are no major external shocks, such as a Brent crude price drop to the 40 to 50 dollar range. In that case, the dollar could rise by 43 percent since the year began and by 64 percent from November against the ruble.
Vasiliev noted that this year the ruble faced capital outflow as demand for foreign currency exceeded domestic supply. The Russian balance of payments came under pressure from a shrinking current account surplus, meaning more money leaving Russia than coming in (the surplus was about 233 billion dollars in 2022 and is expected to fall to around 50 billion dollars in 2023). Historically, this surplus helped keep the ruble strong, around 55 to 65 rubles per dollar.
According to the analyst, some foreign currency revenues do not return to Russia and remain in foreign accounts. The ruble is reacting to higher demand for the dollar and the euro, though the regulator noted that the situation has since stabilized and had only a modest effect on the exchange rate.
The head of the analytical department at Zenit Bank, Vladimir Evstifeev, observed that a weaker ruble would be favorable for the budget. He explained that the cost of one barrel of oil in local currency, which benefits the budget, stands at about 5.3 thousand rubles given this year’s lower production and exports. If the average price of Urals oil stays around 57.5 dollars per barrel, the dollar could be around 92 rubles. He also advised factoring in a volatility margin for oil price movements when planning speculative strategies.
He added that a comfortable dollar rate for the budget sits roughly between 87 and 100 rubles. The 100 ruble level could be a ceiling for the ruble, and turning points beyond that would not align with budget policy and foreign trade conditions. At the same time, there is a risk that exchange rate dynamics could become hard to control, posing risks to the financial system and the wider economy.
Under what conditions will the ruble reach its bottom
In the base scenario, Vasiliev expects the ruble to stay in a band of 85 to 95 rubles per dollar, 94 to 105 rubles per euro, and 11.8 to 13.2 rubles per yuan by year-end. Natalya Lavrova, chief economist at BCS World of Investments, views 82 to 86 rubles per dollar as a baseline for 2023.
Vasiliev warned that a sharp drop in oil prices below 70 dollars could push the ruble toward the 100 ruble per dollar and 110 ruble per euro marks.
Denis Perepelitsa, a lecturer at the Russian University of Economics and head of World Financial Markets and Fintech at Plekhanov, agreed that further ruble devaluation could occur if new sanctions are imposed or if hostilities flare in central Russia. Anton Prokudin, chief macroeconomist at Ingosstrakh Investments, did not rule out a bottoming of the ruble this year followed by continued devaluation next year.
Still, some analysts find this scenario unlikely. Aleksey Devyatov, chief economist at Uralsib Bank, expects higher oil prices to support the ruble.
Roman Chechushkov, head of investment analytics at Renaissance Bank, stressed that the ruble’s depreciation in recent months has not triggered major concerns about financial stability. The Central Bank has signaled that it will avoid unnecessary intervention in the exchange rate.
Inflation moving toward double digits
Vasiliev argued that prices for cars, home appliances, electronics, foreign travel packages, and medicines are likely to rise as the ruble weakens. With a broad price rise and growing consumer demand, many companies not directly tied to imports may increase their selling prices as well.
He warned that if the dollar stays above 90 rubles and moves toward 100 rubles, inflation could near double digits and the policy rate might need to rise to 9 to 10 percent or higher (the current rate is 7.5 percent). As inflation accelerates, loan costs for households would climb, with higher policy rates pushing up yields on federal bonds and mortgage rates.
The rapid ruble depreciation would put pressure on the Central Bank and the government by lifting devaluation and inflation expectations, raising costs for importers and heightening financial stability risks.
To defend a weaker ruble around the 100 ruble mark for the dollar, authorities could deploy verbal interventions, sell yuan from reserves, require exporters to repatriate hard currency, tighten capital outflow controls, and potentially raise the key rate further to limit volatility.