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Peter Davis

An writer at FOMOdrive

  • Nov 23, 2023
  • 2 min read

Alfa-Bank gave a forecast for the ruble exchange rate for 2024

It is unlikely that the dollar exchange rate will remain at its current level for an extended period of time.

It is anticipated by Alfa-Bank that the ruble will experience a decline in value in the coming year.

Bloomberg predicts that the ruble in 2024 will be under pressure due to currency purchases from the National Welfare Fund.

On average, the Central Bank will purchase $2.3 billion worth of yuan each month.

It is not expected that the ruble will remain at its current height for a long period of time. Alfa-Bank predicts that in the upcoming months, the rate will go back to the range of 90-95 rubles per dollar and will continue to decline in the following year, reaching a three-digit rate.

Due to Putin's decree requiring exporters to repatriate and sell their foreign currency earnings, the ruble has been strengthening. In October, sales totaled $12.5 billion, a significant increase from the $7 billion per month seen in the summer. It is likely that this procedure will be discontinued in 2024.

Already, around 40% of exports are paid in Russian rubles, which has weakened the exchange rate. To meet the quota for selling foreign currency, some exporters have to purchase it in addition to the growing share of settlements in the Russian currency.

The population's buying of cheaper currency has caused the ruble exchange rate to weaken. In October, these purchases totaled 108 billion rubles in equivalent, which was double the amount from the previous month. Additionally, non-residents from friendly countries converted an additional 55 billion rubles.

The strengthening of the ruble beyond a certain point is not beneficial for the budget, which is based on an exchange rate of 90 rubles to the dollar. The bank predicts that a more realistic rate for 2024 will be even lower, at 100-110 rubles per dollar.

When the Bank of Russia resumes its postponed purchases of foreign currency to the National Welfare Fund (NWF) in January, the ruble is expected to come under pressure, Bloomberg reports.

The Central Bank is projected to purchase an average of $2.3 billion worth of yuan each month in the coming year, which will take up a considerable amount of the limited foreign currency that Russian exporters receive.

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