The Central Bank set the official dollar exchange rate at above 100 rubles –

The Central Bank of Russia set the official dollar exchange rate for November 20 at 100.03 rubles. The last time this level could be observed was October 10, 2023. In turn, the Central Bank raised the official rates of the euro and yuan to 105.73 and 13.77 rubles, respectively.

Let us explain that with the help of these values, Russian credit and financial organizations set the price for buying and selling currency in their exchangers. The Central Bank, in turn, determines the official exchange rates of the dollar and euro on a daily basis based on the dynamics of over-the-counter trading, and for the yuan it uses data from the Moscow Exchange.

“After Donald Trump’s victory in the US elections, the dollar strengthened sharply on the world market. Its index against a basket of other reserve currencies is now trading at highs in more than a year. This largely explains the rise in the official exchange rate of the Central Bank above 100 rubles per dollar,” Alexander Shepelev, an expert on the BCS World of Investments stock market, explained to RT.

In addition, experts explain the observed weakening of the ruble by the current situation in Russian foreign trade. Thus, recently the country has received fewer dollars, euros and yuan from exports than it goes abroad to pay for imports. As a result, a shortage of foreign currency periodically arises in the domestic market – and it begins to rise in price in relation to the Russian one.

“If previously our companies faced difficulties in making cross-border payments, which limited imports and, accordingly, demand for foreign currency, in recent months the problems have apparently been resolved. In the third quarter, we observed a recovery in imports to last year’s levels,” Alina Poptsova, a stock market analyst at Alfa Capital Management Company, noted in an interview with RT.

At the same time, the influx of foreign currency into Russia from exports has slowed down due to sanctions restrictions, lower oil prices and delays in payments. Natalia Pyryeva, leading analyst at Digital Broker, told RT about this.

Also, according to her, many exporters began to leave foreign currency earnings abroad more often, as the government softened a number of requirements for business. If previously companies had to return at least 80% of earned dollars, euros, yuan from abroad and exchange them for rubles, then in June this threshold was reduced to 60%, and in July – to 40%.

“Taking into account the fact that 40% of revenue comes from settlements in rubles, the percentage of foreign currency received from exporters today is very low. In addition, since November, the Bank of Russia has reduced the sale of yuan from the national welfare fund as part of the fiscal rule. This also became one of the factors in the weakening of the ruble, although less significant,” added RT’s interlocutor.

Between inflation and budget

As Natalia Pyryeva noted, at the moment, the ruble is being given some support by high interest rates, which increase the attractiveness of ruble savings and restrain the outflow of funds from the country. However, even in these conditions, only since the beginning of autumn the Russian currency has fallen in price against the American currency by almost 10%.

According to experts, the rise in dollar, euro and yuan rates plays into the hands of exporters and the state. Thus, as the national currency depreciates, companies, when supplying the same volume of goods abroad, receive a larger amount of revenue in ruble terms. As a result, business profits begin to increase along with the country’s budget revenues.

“The financial authorities are able to maintain the stability of the ruble, which, in principle, we observe throughout 2024 – despite the weakening trend, the exchange rate dynamics were more even compared to 2022 or 2023. In the current realities, when budget expenses are growing and oil prices in dollars are falling, financial authorities prefer not to take measures to strengthen the ruble to replenish treasury revenues,” Pyryeva explained.

• © Fernando Gutierrez-Juarez / picture allianc

At the same time, too strong a weakening of the ruble is also disadvantageous for Russia, since it makes a significant contribution to rising prices, noted Alexander Shepelev. In this regard, with a further depreciation of the national currency, the country’s leadership can take a number of measures to stabilize the exchange rate, the expert is sure.

“Forex sales may increase in December as part of the fiscal rule. Hypothetically, higher standards for repatriation and sale of proceeds for exporters could be returned. In addition, at the December meeting, the Central Bank may again raise the key rate. Although in the near future foreign exchange rates may still reach annual highs, technically the limit of the ruble’s weakening is already close, and, most likely, the dollar, euro and yuan will end the year at approximately the current values ​​or slightly lower,” the analyst suggested.

Natalia Pyryeva expressed a similar point of view. In her opinion, we should not expect a serious weakening of the ruble by the end of this year, since, despite the current situation around imports and exports, trade and payment balance indicators remain at comfortable levels.

“Against this background, we expect the dollar exchange rate at the end of 2024 to be in the range of 95-100 rubles. For the euro, according to our estimates, they will give 103-108 rubles, and for the yuan – 13.3-14 rubles,” the analyst added.

It is noteworthy that the country’s leadership adheres to a more optimistic assessment. Thus, according to the forecast of the Ministry of Economic Development, by the end of this year the dollar exchange rate may drop to 93.8 rubles.