The ruble was predicted to rise above 120 per dollar: under one condition

The event may occur after the March elections

The current situation on the Russian currency and stock markets is comparable to a short period of conditional timelessness, with a certain general atmosphere of apathy and lethargy characteristic of the first days of January. The ruble exchange rate is in the so-called “flatness”, when there is no obvious trend either upward or downward. On January 7, the Central Bank set it at 89.6 per dollar and 99.1 per euro.

The pre-New Year surge in consumer activity is behind us. The demand from citizens and importers for foreign currency, traditionally observed at the end of the year, is declining. According to experts, you shouldn’t expect any surprises from the ruble before the March presidential elections. But then, especially in the second and third quarters of 2024, everything is possible.

Russians risk seeing the dollar at 100 or even 120 rubles unless, in particular, the decree “On the mandatory sale of foreign currency earnings by exporters on the stock exchange” is not extended.

After its completion in mid-April, a shortage of foreign currency will almost certainly begin to form on the stock exchange. Moreover, oil prices may fall to $65-70 per barrel Brent – against the backdrop of a slowing global economy and lower demand for hydrocarbons, primarily from China.

“So far we see that the ruble is staying in the 89-93 corridor,” states financial analyst Sergei Drozdov. – This is a classic “sideways trend”, in stock exchange slang meaning the absence of a trend in one direction or another. Until recently, it seemed that in order to curb inflation, the monetary authorities would try to push the exchange rate into the range of 80-85. But the time for this was lost: just before the New Year, many importers and product manufacturers began to raise prices. And today the markets are already getting used to it, adapting to the new reality. Before the March elections, there are no prerequisites either for the ruble to go beyond the “Nabiullina line” of 102 per dollar, or for its strengthening to 85. Unless, of course, some serious geopolitical shake-up occurs during these months.”

There is a widespread opinion that government support for the ruble is limited to the election period, and then the grass will not grow. In reality, the situation is determined by many different factors: geopolitics, oil prices, risks of a global recession, and other circumstances.

Now we have some conditional stability. But sooner or later the rate will go beyond 120 per dollar. This is how the market already works, Drozdov argues: if the price reaches this level at least once (as in March 2022), it will definitely return there. It’s a question of time.

Let us recall that last year the Russian currency crossed the 100 mark per dollar twice – in August and October. And in January 2023, the rate was 75 rubles per “American”.