Dollar exchange rate. Forecast for August 14–18
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For the second week in a row, the ruble is rapidly losing ground against the world’s leading currencies. On Friday, the exchange rate of the dollar for the first time since March 2022 approached the level of 99.5 rubles / $, the euro exchange rate rose above 109 rubles / €. The main reasons for the depreciation of the ruble remained the same – a disproportion between exports and imports, increased capital outflow and seasonally high demand for foreign currency from the population.
| Banks | Dollar exchange rate forecast (rub/$) |
|---|---|
| Bank Zenith | 98.00 |
| BCS World of Investments | 95.00-100.00 |
| Expobank | 98.00-100.00 |
| Russian Standard Bank | 96.00-99.00 |
| PSB | 100.00-101.00 |
| Consensus forecast * | 98.50 |
* The consensus forecast was calculated as the arithmetic mean of analysts’ forecasts
We do not exclude an exit to the level of 101 rubles / $
The pressure on the positions of the national currency is exerted by the shortage of supply in the market, which is accompanied by a constant demand for the currency from importers. We believe that next week the dollar may renew its maximum and reach 100 RUR/$. We do not rule out an exit to the level of 101 rubles / $, where a noticeable overheating of the currency will be traced, followed by a correction.
Increased demand for currencies comes against the backdrop of formed imbalances in the balance of payments
Positive for the ruble news on the energy market is the growth of Russia’s income from fuel exports over the past July by $2.5 billion. However, the IEA data on the reduction in July volumes do not add optimism. The main driver of the ruble exchange rate will be the balance of payments, where the pressure of importers is clearly felt in the face of shrinking exports. Meanwhile, the dollar and euro rates at the end of the week continue to update the highs of March 2022. The increased demand for currencies comes against the backdrop of imbalances in the balance of payments. The dollar strengthened after the publication of data on a slight increase in consumer prices in July in the US. The yuan is also growing, but not in its favor – the Chinese economy is growing worse than expected and the general business activity is declining there.
These milestones can become a reversal for the trend in the ruble
Our forecast for the ruble/dollar exchange rate for next week is 95-100 rubles/$. Basically, the ruble continues to be pressured by the imbalance of imports and exports of goods and increased budget spending, locally could be affected by the growth of the dollar against major currencies and a general decrease in risk appetite. The national currency’s revenge is hindered by the downward dynamics in the ruble debt market. The RGBI government bond index has been declining for 12 consecutive sessions and is at its lowest level since May 2022. The dollar has approached the psychological mark of 100. We tend to believe that these milestones may become a reversal for the trend in the ruble. This can be helped both by the increase in oil prices, which has been outlined since the end of July and is able to be translated into the strengthening of the ruble with a temporary lag, and by the potential intervention in the situation by the financial authorities.
Supported by rising oil prices
The ruble slows down the pace of weakening as it approaches the level of 100 rubles. per dollar. Although the Central Bank of the Russian Federation suspends the budget rule, it remains an adherent of floating exchange rates, so it is hardly worth counting on more significant support for the national currency. The main parameters of the balance of payments for July do not correlate with the current behavior of the ruble, which increases the share of the speculative component in the current trend. Support is the rise in oil prices, including Urals, which is actively reducing spreads to benchmark world grades.
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