Russian Rouble’s Value Slides, but Experts See Stabilization Ahead
The Russian rouble has seen a decline in value against the US dollar, falling from 90.4 to 105 rubles per dollar by the end of 2024, according to Denis Astafijew, founder of SharesPro.
The rouble’s value began to slide in July, with a gradual decline over the months. On average, the rouble lost 15% of its value against the US dollar, 8% against the euro, and 11.7% against the yuan.
Experts point to a combination of factors, including the impact of sanctions, the country’s trade balance, and the central bank’s monetary policy, as contributing to the rouble’s decline.
The Russian government and central bank implemented strict currency restrictions, including a requirement for exporters to sell up to 80% of their foreign exchange earnings, and reduced imports. However, in 2024, the requirements for exporters were relaxed, partly due to the sanctions and partly because the exporters and the state budget benefited from a cheap rouble, according to Natalia Miltschakowa, a leading analyst at Freedom Finance Global.
Another factor was the sanctions, which led to a shift in demand for foreign currency, combined with rising inflation and payment problems for Russian exporters and importers, Miltschakowa added.
The rouble’s decline was most pronounced in November, with a decrease in foreign exchange inflows into the country, according to Alexander Potawin, an analyst at Finam Financial Group.
The rouble’s value began to rise again after December 20, with some experts attributing this to the central bank’s decision to maintain the interest rate, rather than increase it, as expected. The rouble’s reaction was not to the interest rate itself, but to the central bank’s comments, which indicated that a further rate hike was not a foregone conclusion, said Miltschakowa.
In the long run, the rouble’s value is expected to be influenced by the geopolitical situation, with a potential end to the conflict between Russia and Ukraine or a further escalation of the conflict, said Andrei Stoljarow, a leading expert at the Higher School of Economics.
The rouble’s value is also expected to be affected by the new western sanctions and the price of oil, said Stoljarow.
Experts predict the rouble’s value will range from 98 to 106 rubles per US dollar in the first quarter of 2025, with a potential decline if the oil prices fall or Russian exports decrease, according to Potawin.
Denis Astafijew, a leading expert at the Higher School of Economics, expects the rouble’s value to stabilize in the range of 100 to 110 rubles per US dollar in the beginning of 2025, with a moderate appreciation in the summer and a potential decline in the fall due to seasonal factors.