Why has the ruble gained ground?
The ruble has appreciated following the government’s decision to require a portion of exporters to convert a share of their foreign earnings into rubles. A rise in oil prices, linked to global events in the Palestinian-Israeli region, also supported the currency. These observations come from Denis Perepelitsa, a Candidate of Economic Sciences and Associate Professor at the Department of World Financial Markets and Fintech at the Russian University of Economics. GV Plekhanova.
Sovcombank’s chief analyst, Mikhail Vasiliev, noted that the ruble strengthened since October 12, when the decree was announced.
The decree took effect on October 16 for six months and applies to 43 corporate groups tied to fuel and energy, metal production, chemicals, forestry, and grain farming. Under state rules, these companies must park at least 80 percent of their foreign earnings in domestic accounts and sell 90 percent of that amount.
“The 100 rubles per dollar threshold appears important and is likely to be kept through various administrative actions. This has cooled speculative bets against the ruble over the past ten months,” Vasiliev said.
Anatoly Trifonov, a BCS Forex analyst, added that the ruble tends to strengthen in the final ten days of each month as exporters settle tax obligations by selling foreign currency.
“We expect October to see higher oil and gas budget revenues because of elevated oil prices, alongside possible delays in fuel carrier payments in September due to high domestic prices. This means exporters may need to sell more foreign currency to meet tax duties,” he explained.
Vasiliev suggested the ruble will be steadied by the Central Bank’s daily sale of yuan from reserves as part of budget operations, and the introduction of new export taxes on October 1. These export taxes could raise the market supply of foreign currency by roughly $0.6 billion each month, he estimated.
“An anticipated rise in the key interest rate by 100–200 basis points to around 14–15% this Friday would support the ruble. Higher rates tend to attract ruble savings, tighten credit, and reduce the demand for foreign currency for imports in the coming months,” he added.
What is the upper bound on ruble strengthening?
“The ruble could strengthen further this week given the factors above. A plausible trading range would be 91–96 rubles per dollar, 97–102 rubles per euro, and 12.4–13.1 rubles per yuan,” Vasiliev projected.
In a base scenario, the ruble could stay in a 90–100 ruble per dollar band through year-end. The analyst does not expect a prolonged strengthening cycle. By early November, a slight weakening after the tax period may occur.
“Exporters may be less active at the month’s start, while importers could step up purchases to stock up for New Year holidays and sales. Inflation may creep toward 7.5% by year-end, and budget spending could rise. Those factors will push ruble money supplies higher and support imports at the same time,” Vasiliev noted.
He also indicated that higher oil prices, the reintroduction of compulsory sales by large exporters, and a potential rise in the key rate could underpin the ruble, potentially pushing the rate up to around 15% by year-end.
Vasiliev expects the ruble to sit around 94–98 per dollar, 100–105 per euro, and 12.8–13.4 per yuan by year-end.
Perepelitsa argued that the ruble’s strengthening ceiling is effectively set in the federal budget, based on a level of about 92 rubles per dollar. “Manual shock-absorber mechanisms will help keep the ruble near 92–95 in the near term. If foreign earnings are managed to avoid excessive supply on the market, a stronger ruble below 92 could threaten the budget deficit,” the economist said.
He concluded that if macroeconomic conditions stay stable, the ruble should remain within the established range. A sharp shift due to sanctions changes or a global financial crisis could cause larger fluctuations regardless of state actions.
Trifonov added that the foreign exchange market remains tighter than before 2022, which suggests ongoing volatility for the ruble.
“In a base scenario, the ruble could reach about 94.1 per dollar by year-end. Given higher volatility, the rate may oscillate between 90 and 96 per dollar,” he noted.
Pavel Zhuravlev, head of investment analytics at Renaissance Bank, observed that the dollar’s level above 90 rubles since early August may influence inflation trends. “Staying near those values won’t drive further price increases, so the ruble could strengthen while keeping the floor at 90 rubles per dollar”, he stated.