On the close of trading on Wednesday, January 31, the dollar exchange rate reached 90.02 rubles. Market observers noted that activity across all business days during the period of strong FX buying and selling remained elevated, with the last completed transaction dated January 8 at the 90 ruble level. This pattern marked a similar situation not seen since the start of the year 2024.
At the January 31 close, the euro was valued at 97.58 rubles, with a comparable level last observed on January 10.
Economist Maxim Petronevich, formerly head of the Center for Macroeconomic Analysis at Rosselkhozbank, explained that the easing of consumer price growth in Russia to 1.11% year-over-year in November and to 0.73% in December 2023 creates the conditions for the eventual completion of the Central Bank of Russia’s current rate hike cycle.
He also indicated that at the upcoming meeting on February 16, the regulator is likely to keep the interest rate unchanged at 16% per annum. Yet the inflation slowdown could allow for a rate cut earlier than previously anticipated, potentially before the end of 2024.
Historically, the Central Bank of the Russian Federation has already raised the key rate to 16% in response to inflation pressures and domestic economic conditions. Market participants continue to monitor inflation trends, external commodity prices, and the overall trajectory of Russian monetary policy as they assess the path for policy in the near term.