The ruble was predicted to have a cold winter: what will happen to the exchange rate in February

Economist Loboda: “A sudden acceleration of the dollar exchange rate to 100 rubles is possible”

After the rather nervous last months of the previous year, accompanied by serious fluctuations in the ruble exchange rate, calm reigns in the foreign exchange market in January. Over the past week and a half, the Russian currency has even somewhat strengthened its position against unfriendly “foreigners”: from 90.5 to 88.5 for the dollar and from 99.2 to 96.5 for the euro. But most analysts still doubt the long-term stability of the ruble exchange rate. At the same time, possible scenarios for fluctuations in the value of the national currency differ radically. MK asked two economists to share exchange rate forecasts for the weeks remaining until the end of winter: Freedom Finance Global leading analyst Natalya Milchakova and BitRiver communications director Andrey Loboda.

– What factors and in what direction will influence the ruble exchange rate in February?

Milchakova: “Among the positive events for the ruble in February, one can note, firstly, the OPEC+ meeting at the beginning of the month, which could lead to an increase in oil prices and affect the strengthening of the ruble. Secondly, a meeting of the board of directors of the Central Bank of the Russian Federation on February 16, at which, most likely, a decision will be made to maintain the key rate at 16% per annum, although a new increase cannot be ruled out, depending on inflation dynamics. In any case, we can expect that the monetary policy and rhetoric of the Central Bank of the Russian Federation will remain tough, which will be positive for the ruble. The ruble will also be positively affected by the mandatory sale of foreign currency earnings by exporters and, in early February, by the continuation of foreign currency sales by the Ministry of Finance and the Central Bank of the Russian Federation.

Among the risks for the ruble, there may still be new sanctions against Russian business. At the beginning of February, the ruble will probably win back the results of the US Federal Reserve’s decision on the interest rate, adopted on January 31. If the Fed’s rhetoric remains tough, then this could have a short-term negative impact on the ruble.”

– What events could lead to a sharp collapse or a noticeable strengthening of the exchange rate in February?

Milchakova: “Black swans—any unexpected negative events that we don’t even suspect today—can lead to a sharp collapse. However, it is possible that if after February 6 the Ministry of Finance begins to buy foreign currency instead of selling, and the Central Bank of the Russian Federation stops mirroring past operations of the National Welfare Fund, then the ruble may again move towards 95 rubles per dollar and 105 rubles per euro. The results of the meeting of the board of directors of the Central Bank of the Russian Federation, as well as the continuing sale of foreign currency earnings by exporters, may lead to a strengthening of the ruble. Also, news from China can create volatility in the ruble: for example, if news appears that confirms assumptions about a slowdown in the Chinese economy, the ruble may go down in the short term.”

Loboda: “It is highly likely that the symbolic strengthening of the ruble, which began in the second half of January, will continue in February. Week after week for the Russian currency will symbolize the restoration of positions, but there is no reason to talk about a return to the rates of a year ago (70 rubles per dollar). The new reality today is the possibility of sudden waves of weakening of the ruble and another acceleration of the dollar to 100 rubles. Such a scenario is not excluded, but, in our opinion, it is more likely in the second half of the year. Sharp collapses of the ruble are, in principle, undesirable; after 30 years, almost all market participants and especially the people have become very tired of this.”

– In January, the Ministry of Finance and the Central Bank sharply increased the volume of transactions in the foreign exchange market, should we expect the same in February and how does this affect the exchange rate?

Milchakova: “The volume of transactions of the Ministry of Finance and the Central Bank of the Russian Federation will remain high in February. It is not yet clear what the policy of these two departments will be after February 7. It is possible that currency sales will continue just before the presidential elections scheduled for mid-March, and the Ministry of Finance will begin buying foreign currency later – at the end of March-April.”

– What is your forecast for the exchange rate in February?

Milchakova: “We expect that the dollar in February may be in the range of 83-93 rubles, the euro – in the range of 94-104 rubles, the yuan – in the range of 11.8-12.9 rubles.”

Loboda: “Until the end of the first quarter of 2024, it is quite obvious that the ruble will gain strength and may even break below 80 per dollar.”