The ruble climbed past 101 per dollar for the first time since March of last year, as Moscow time showed around 14:20. The dollar traded near 101.4 rubles, with the euro around 111 rubles.
In July, Mikhail Vasiliev, chief analyst at Sovcombank, told socialbites.ca that these levels mark a local nadir for the ruble. He warned that prices for cars, home appliances and electronics, travel abroad, medicines, and loans could rise in the months ahead due to a weaker ruble.
“If the dollar hovers above 90 and moves toward 100, inflation could approach double digits, and the central rate would likely need to rise to 9–10 percent or higher,” Vasiliev noted.
The expert added that, against a backdrop of broader price increases and growing consumer demand, other companies not directly tied to imports might also lift their selling prices.
What to do with rubles at this dollar rate?
Financial analyst and economist Mikhail Belyaev explained to socialbites.ca that Russians’ actions depend on whether they want to protect savings or grow them, and also on the amount involved.
“People buy at the bank’s selling rate, which is higher, and when they need rubles to purchase goods or services, they sell back to the bank at the bank’s buying rate, often with roughly a 10% spread,” he said. “To return to parity, the ruble would need to depreciate by around ten percent.”
He added that the ruble has weakened against all major currencies, so the choice of currency for savings is less important than the overall strategy.
“Only three currencies look like viable stores of value: the dollar, the euro, or the yuan. Everything else is not seen as an investment,” he remarked.
Will travel slow down for Russians?
ATOR Vice-President Artur Muradyan told socialbites.ca that currency gains did not cause a panic, but they did affect travel pricing.
“The starting price for foreign trips in the current environment will be between 180,000 and 200,000 rubles, which hits the budget segment the hardest,” Muradyan said. He added that if the ruble moves to 115–120 per dollar and 140–150 per euro as seen in 2022, travel would become a luxury for many.
“Based on current sales patterns, operators see a thinning of demand in the budget segment, with the middle and higher segments remaining steadier. This is a sensitive situation, and some operators focused on affordable travel may face challenges.”
He also warned that destinations expecting large tourist flows could suffer: Egypt, Thailand, Sri Lanka, and Colombo, in other words markets outside the premium tier.
“Smiles without stress”
Anatoly Aksakov, chair of the State Duma financial market committee, said the public closely monitors the ruble-dollar ratio and that the government is keeping a firm handle on the situation.
“People in various regions carry on with daily life and remain optimistic even as the dollar approaches 100 rubles,” he stated. Aksakov added that Russia is experiencing a positive development trend.
He noted that growth rates may lag because the economy still leans on oil, gas, and energy carriers, but engineering, tooling, and electrical sectors are strengthening, according to the official’s assessment.
Why the ruble is weakening
Velyaev described the ruble’s depreciation as a signal of notable economic challenges.
He attributed the decline to the market economy, which, despite some progress, remains in a sluggish phase.
The economist believes that without substantial reforms in the near term, the ruble will likely continue to fall against the dollar. He also observed that the central bank’s policy aims to curb inflation, but the broader economic dynamics hinder growth.
Deputy to the president Maxim Oreshkin, in a column for TASS, attributed the current rate to a soft monetary policy. He noted that the central bank possesses tools to stabilize lending costs in the near future.
What lies ahead?
Belyaev expects the ruble to stay within the 110–120 range as the economy remains relatively resilient, though isolated sectors may adjust. Without major shifts, a continued depreciation against the dollar remains possible.
He also underscored that the central bank’s actions could alter the risk landscape. While there is no immediate threat to financial stability, further tightening in monetary policy could be on the horizon to keep inflation in check.
There is note of no imminent danger to macro stability, and authorities remain confident in a path toward normalization. The central bank is prepared to adjust policy as needed to balance inflation with economic activity.