‘The dollar rate can be 103-105 rubles by the end of the year’
The ruble rate will be stable enough in the first quarter of 2024, while dollar will be around 90-95 rubles. Board Chairman of Finam financial group Vladislav Kochetkov shared such a forecast with Realnoe Vremya. The expert is sure that gradual weakening will start in the second half of the year and the American currency will reach 103-105 rubles.
The Ministry of Finance allocated 244.8 billion rubles to buy currency
In late December, the Bank of Russia said it would start transactions in the domestic currency market related to the replenishment and use of money of the National Well-Being Fund from 9 January 2024, including all transactions including the money of the fund in 2023. So the Ministry of Finance allocated 244.8 billion rubles from 7 to 12 January to buy currency within a budget rule, the daily purchase amount totalled 11.7 billion rubles.
“Additionally, the Bank of Russia will also complete the sale of currency to reflect investments in the fund in the first half of 2023 (0.8 billion rubles a day). So the Central Bank sold 0.9 billion rubles a day from 9 to 12 January,” Vladislav Kochetkov told Realnoe Vremya.
According to him, the amount of transactions on other days will be clear after the Ministry of Finance announces the amount of transactions in the budget rule. Earlier, the Bank of Russia claimed transactions related to the replenishment and use of the fund’s money in the domestic currency market, including all transactions with the fund’s money in 2023, from January. In late June 2024, the Bank of Russia will correct the amount of these regular transactions. The dynamics of the ruble rate will depend on this.
“It is necessary to be ready to see a new wave of weakening ruble”
As Vladislav Kochetkov said, oil prices this year can also influence the ruble rate’s dynamics:
“The weak oil price dynamics can have a negative impact on the ruble in 204 because of a fall in the growth pace of the US and Chinese economies. And if the sanctions pressure on Russia keeps on growing, which will lead to a lower Urals oil price compared to Brent, the dynamics of trade and settlement balance of Russia should be expected. As a consequence, there will be a deficit of currency in the domestic market and a weaker ruble rate. Given this, we are expecting the ruble rate will be relatively stable in the first half of 2024 and it will gradually weaken in the second half of the year,” Kochetkov shared.
According to the Finam board chairman, in late 2023, the Central Bank made it clear that we should be ready for a cancellation of stock transactions with the US dollar in case sanctions were imposed on the Moscow Exchange. In this case, as the expert noted, the Central Bank is ready to switch to off-market ruble rate fixing against the American currency. But this also means that the ruble will lose its status of converted currency and its rate on the basis of big banks’ evaluations can be different from the market, he added.
“Given all the above-mentioned factors, we assume that the ruble rate will be stable enough in the first quarter of 2024 and the dollar will be around 90-95 rubles. From April-May, it is necessary to be ready to see a new wave of weakening ruble. A rise to the highs of 2023, which is 102 rubles, will be the short-term goal of the dollar rate rise. The dollar rate can be 103-105 rubles by the end of the year,” Kochetkov concluded.