As of 15:57 Moscow time, the dollar traded at 88.8 rubles and the euro at 96.2 rubles according to foreign exchange data.
A chief analyst from Sovcombank, Mikhail Vasiliev, explained that the ruble had strengthened in recent days due to weaker imports caused by sanctions, the May tax period, and expectations that Russia could raise its key rate (currently 16%).
“At the start of this week, the ruble will enjoy support from the May tax period, as exporters are required to sell foreign currency earnings to fund the budget through May 28. From Wednesday through the end of June, that support should fade,” Vasiliev noted.
He added that the factors driving ruble strength and weakness had been balanced, contributing to the exchange rate’s stability over seven consecutive months.
Pros and cons of ruble strengthening
The analyst highlighted several factors that favored the ruble, including the mandated sale of exporters’ foreign earnings, elevated oil prices, a surplus in Russia’s current account, and the use of reserves to sell yuan totaling 6.3 billion rubles daily. He also cited high ruble interest rates tied to budget operations as a contributor.
Vasiliev forecast that the Central Bank could raise the rate by another 100 basis points to 17 percent in upcoming meetings and maintain that level through year-end. Such a move would likely push up deposit rates and attract ruble savings, further strengthening the ruble, the analyst said.
Negative factors for the ruble included ongoing foreign tourism, geopolitical and sanctions risks, capital outflows, demand from foreign owners to buy Russian shares, higher budget expenditures, and seasonal demand for foreign currency during May, along with imports.
BCS Forex analyst Anatoly Trifonov told socialbites.ca that the current ruble appreciation appears short-term, driven more by the impact of financial sanctions on imports than on exports.
“The present strengthening mirrors 2022 dynamics, but a full repetition is unlikely. Authorities are engaging with new trading partners such as China, the UAE, and Turkey to ease cross-border payments, and Russian businesses have grown adept at circumventing sanctions over the past two years,” the analyst added.
What might happen this summer?
Vasiliev’s view is that the ruble could stay relatively steady through the summer, with the dollar trading roughly between 85 and 92 rubles and the euro between 92 and 100 rubles. Denis Perepelitsa, a scholar and director at the Federal Financial Literacy Methodological Center, predicts the dollar may hover around 85–90 rubles in the summer.
“During the warmer months, the dollar could range from 87 to 100 rubles. By year-end, a floor near 87 rubles seems unlikely, but a move toward 100 rubles by late summer is possible,” BitRiver’s Andrei Loboda said.
Vasiliev believes the ruble could maintain stability barring any new shocks. Trifonov cautions that the dollar might not dip to 85 rubles, and Perepelitsa concurs that 90–95 rubles is a plausible target by late July. Another expert, Konstantin Tuzov of the Presidential Academy’s Structural Research Laboratory, believes most drivers of ruble strength could fade within the year, pushing the currency toward 95–97 rubles. The Russian Ministry of Economic Development shares a similar outlook for annual averages around 94.7 rubles, with near-term risks skewing higher. A seasonal dip for purchases of foreign currency may occur in summer as well.
If currency purchases are needed, it is often advantageous to consider the summer period when the dollar may be at a relatively low point.