The ruble between euphoria and life: experts disagree in their assessments of the ruble exchange rate situation

Bloomberg analysts have called the ruble the “best performing” currency in developing countries since the beginning of 2025. They were impressed by the rapidity of its strengthening against the dollar — by 13% in less than two months. In turn, domestic investors, inspired by the very fact of negotiations in Riyadh with the participation of US and Russian delegations, expect the ruble to continue this stormy rally in March. However, one should not overestimate what is happening: in addition to euphoria, there are fundamental things. Such as the growth of price discounts on Russian oil, and the problems that a strong ruble creates for the budget.

88.17 — this is the dollar exchange rate set by the Central Bank for the weekend of February 22–23. Meanwhile, on January 22, the official rate was 99.92, and on January 15 — 103.43. This gives grounds to speak of an extremely high degree of volatility and unpredictability of the Russian currency market. The situation on it was previously determined by a great many different, sometimes non-obvious factors, and today a new portion has been added to them, generously seasoned with geopolitical sauce. What rate can be considered fair for the ruble in this darkness — 85, 90, 95, or maybe 100? Where will it move in March, is there a chance that it will reach the half-forgotten values ​​of 75–80? How to understand all this?

In principle, in the short term, the ruble may strengthen even more, albeit slightly. The February optimism of investors is due to a surge of expectations and hopes associated with some half-hints of a quick peaceful settlement, a global warming of relations between Washington and Moscow, the return of Western brands to the Russian Federation, a partial lifting of sanctions, and an influx of foreign capital. However, there is no talk of real decisions and shifts yet: as First Deputy Prime Minister Denis Manturov noted, none of the companies “have yet asked for anything”; “first let the sanctions be lifted, and then we can talk about a return.” Accordingly, market optimism has its own exhaustible sources and strict time frames.

Rather, what is happening now with the ruble should be treated as a temporary deviation from fundamentally justified levels. Seasonal circumstances are also having an effect, including the traditional reduction in import activity in the first quarter of the year, which entails a decrease in demand for foreign currency. So the scales may well tip in the opposite direction as early as March. As analysts remind us, neither the Ministry of Finance nor raw materials exporters are categorically interested in an over-strengthened ruble: in this form, it greatly interferes with balancing budget expenditures. And it seems that Siluanov's department, with the support of the Central Bank, is unlikely to allow it to reach the 80 mark. Since financial regulators managed to stop the process of a precipitous fall of the Russian currency in November-December 2024, why not take some steps of the opposite nature in March 2025?

The most important macroeconomic factor for the exchange rate today is not so much the dynamics of energy prices as discounts to Russian grades of oil. In March, according to forecasts, the price of the benchmark Brent brand will remain close to the current, quite comfortable for the exchange rate, values ​​of $73-78 per barrel. But the discounts have expanded - as a result of the January US sanctions against the Russian oil sector, in particular, the shadow fleet vessels and two large oil and gas companies. According to the Argus pricing agency, the Urals discount to the benchmark quotation in February increased to $14.6-15.6 per barrel, against $12.8-13.4 in January. And since the government's expenses increased significantly at the beginning of the year, and the January budget deficit amounted to 1.7 trillion rubles, this is not very pleasant news.

The experts interviewed by MK differ in their assessments regarding the situation with the March ruble exchange rate. For example, Alexey Vedev, director of the Center for Structural Research at RANEPA, is convinced that the Russian currency will not reach the 80 mark, moreover, in the very near future the Ministry of Finance will push it in the opposite direction, definitely above 90. Of course, there is no point in talking about the dollar at 60 or 50, but the figure of 80 looks quite realistic, believes financial analyst Sergey Drozdov.

Published in the newspaper "Moskovsky Komsomolets" No. 29468 of February 24, 2025

Newspaper headline: Ruble between euphoria and life