Dollar exchange rate. Forecast for March 18–22

Maxim Timoshenko,
Director of the Financial Markets Operations Department

Maintaining a fairly tight monetary policy continues to play its role in stabilizing the ruble

Oil prices, as well as maintaining increased activity of exporters, may currently support the Russian ruble. Maintaining a fairly tight monetary policy continues to play its role in stabilizing the ruble. Meanwhile, the center of global attention is the latest publication of statistics on unemployment claims in the United States, retail sales and producer prices. And also – another report from the IEA on the situation on the global oil market, which can have a significant impact on oil prices in the coming days. Meanwhile, fresh data on manufacturing inflation in the United States may adjust forecasts for the further movement of the Fed rate towards monetary policy easing.

Denis Buivolov,
analyst

There is a tough monetary policy on the side of the ruble

Our forecast for the ruble to dollar exchange rate for next week is 90.5–92.5. If the presidential elections take place without incidents, then from the beginning of next week the ruble will most likely begin to strengthen. The dollar may move to the area of ​​91. The ruble can be given strength not only by political certainty and a calmer news background, but also by additional sales of currency by exporters in anticipation of the tax period. The ruble also has a tough monetary policy on its side, which will continue after the March meeting of the Central Bank. At the same time, one cannot count on a significant strengthening of the ruble due to the persistent imbalance between the limited influx of export currency into the country and the increased demand for it from importers and investors. We also note negative dynamics in the ruble debt market.

Vladimir Evstifeev,
head of analytical department

The focus will be on the meetings of the US Federal Reserve and the Central Bank of the Russian Federation

Ruble exchange rates are stabilizing within the current range of medium-term volatility, reflecting the balancing of forces in the domestic foreign exchange market. Oil prices are supporting the Russian currency, as is the approaching tax period in March, which is set to increase by 50% compared to the previous month. The focus will be on the meetings of the US Federal Reserve and the Central Bank of the Russian Federation. Fed officials may tighten their rhetoric after February inflation data, which could strengthen the dollar’s position. The Bank of Russia is also likely to maintain the tone of statements at the level of the February meeting, which will be neutral for the ruble.

The dollar exchange rate may inertly return to the range of 93–93.5 rubles

The dollar exchange rate at the end of the week rose above 92 rubles. More stable demand for the currency was facilitated by concerns about the prolongation of the period of high rates, which slightly increased risks for the economy and financial markets, as well as investor uncertainty about exporters maintaining sales volumes next week. An additional factor is the strengthening of the dollar, which is most in demand among importers and speculative participants in world markets. At the beginning of next week, the dollar exchange rate may inertly return to the range of 93–93.5 rubles, which has been a resistance level since the beginning of December.

Comments from central bankers may have an impact on exchange rates

The next week will be busy with meetings of the world’s central banks. Decisions on interest rates will be made by the Bank of Australia, the US Federal Reserve, the Bank of England and the Central Bank of the Russian Federation. The main factors at play will be the US Federal Reserve meeting on Wednesday and the decision on the key rate of the Central Bank of the Russian Federation on Friday. The base scenario is to maintain the current high rates at the next meetings in an environment of increased inflation. Comments from central bankers may have an impact on exchange rates through increased volatility. At the same time, the tax period will also begin next week, which may support the ruble exchange rate. We maintain the target trading range for the national currency within 90–93 rubles/$.

Dmitry Rozhkov,
treasury director

Presidential elections may cause high volatility in markets

We believed that the ruble would have the potential for local strengthening this week due to a potential improvement in the current account balance in February. However, at first the Bank of Russia worsened its estimate of the trade balance for January to $7.8 billion from $9.7 billion. This caused some negativity in the foreign exchange market. And the assessment of the current account at the end of February improved both in monthly terms and in comparison with February 2023, but still foreign trade indicators remain at a low level. Thus, the current account balance last month amounted to $5.2 billion ($4.5 billion in January 2024 and $3 billion in February 2023). We believe that the presidential election, which ends on Sunday, could cause high volatility in the markets next trading week. The classic scenario is continued trading in the range of 90–93 rubles per US dollar. But still, incoming data on foreign trade and reports that the government is considering the possibility of fully or partially exempting exporters from selling foreign currency earnings could lead to the national currency breaking through the upper limit of the range.