The interbank currency market in Russia is currently seeing a temporary strengthening of the ruble. This trend is attributed to the Russian Central Bank halting foreign currency purchases on the domestic market and expanding payment methods for Russian gas after U.S. sanctions against Gazprombank.
According to financial analysts, the ruble exchange rate is expected to fluctuate between 98 and 106 per U.S. dollar by the end of 2024.
However, several factors are expected to negatively impact the ruble, including the European Union's 15th sanctions package, escalating global and regional conflicts, and declining demand for Russian raw materials from key clients such as India, China, and Turkey due to economic or geopolitical reasons.
The anticipated hike in the key interest rate during the Russian Central Bank's board meeting on December 20 may stabilize the ruble only in the short term.
The Central Bank’s measures to strengthen the ruble exchange rate will have a temporary effect and are likely to deplete foreign currency reserves. As a result, further devaluation of the ruble is projected in 2025, driven by the ongoing war against Ukraine.
