The ruble softened by about 2.3 percent against the dollar in July, driven by a narrower trade balance as the country imported more than it exported. Analysts point to the ongoing gap between imports and exports as a key factor behind the ruble’s depreciation, a trend highlighted in the July Financial Market Review published by the Central Bank of the Russian Federation.
Officials noted that exporters converted roughly $6.9 billion of foreign currency earnings in July, which marks a 1.6 percent decline from June. By contrast, the total currency sales for the month stood at about $7 billion, underscoring sustained intervention from market players and institutions aiming to manage the currency’s volatility. The ruble faced continued pressure throughout the month, echoing the pressures seen in the preceding period, as the foreign trade balance remained unfavorable.
The regulator reported that the ratio of net foreign currency sales to foreign exchange earnings by the largest exporters—excluding the ruble portion—was 84 percent in June, down from 88 percent in May. These figures are released with a delay, consistent with the bank’s schedule for publishing quarterly and monthly data on external sector activity.
Amid the ruble’s depreciation, Russian households were active in the currency market, selling foreign currency to the tune of 44 billion rubles. Most of these interactions occurred in the first half of the month. Banks and individuals participated in currency exchanges both on the stock exchange and through major banking channels, with daily volumes in the neighborhood of 16.4 billion rubles and 28 billion rubles respectively. Among institutions, systemically important banks emerged as the dominant sellers in July, increasing their take from 528 billion rubles in June to 377 billion rubles for the period reported in July. The shift highlights how larger lenders respond to market fluctuations and the evolving demand for foreign currency among domestic participants.
Looking back to the month of June, the ruble fell roughly 10.4 percent against the dollar, according to data from the Central Bank. Market observers noted the day’s movements on the Moscow Exchange, where at 17:18 Moscow time the ruble traded around 96.95 to the dollar, marking a rise of about 1.66 percent from the session’s opening. Intraday momentum showed the dollar pushing toward the 97 ruble level, a threshold that has historically signaled notable resistance for the currency.
Historically, this period has been described in market commentary as a challenging stretch for the ruble, often labeled by analysts as a difficult sequence for the currency. The combination of a widening trade deficit, exporters converting earnings, and the actions of large banks all contributed to the currency’s recent trajectory. While the central bank monitors these dynamics closely, it remains evident that a sustained improvement in the trade balance plus stable capital flows would be required to shift the ruble’s course in the near term.
In summary, July’s data reflect a continuation of the ruble’s vulnerability amid a persistently fragile external balance and ongoing exporter activity, set against a backdrop of domestic demand and policy responses that shape daily trading behavior. The market will likely focus on forthcoming trade statistics and central bank communications to gauge whether conditions might stabilize or if renewed volatility could re-emerge.