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Peter Davis

An writer at FOMOdrive

  • Aug 31, 2023
  • 2 min read

Sinara investment bank gave a forecast for the ruble exchange rate at the end of the year

It is anticipated by Sinara Investment Bank that the ruble will become stronger during the fourth quarter of the year.

At once, multiple factors can contribute to the appreciation of the Russian currency.

The bank believes that the ruble bottomed out in August.

On Wednesday, the dollar exchange rate exceeded 96 rubles and the euro rate was 105 rubles. After a brief period of strengthening, the Russian currency started to weaken again, despite the Central Bank raising its rate and reaching an agreement with exporters to increase the sale of foreign currency earnings on the market.

Experts believe that the depreciation of the ruble is due to the ongoing imbalance of supply and demand, as well as the activities of speculators.

"Sinara" Investment Bank suggests that there are several factors that should contribute to the ruble's recent push off the bottom.

The bank predicts that the average price of Brent in the fourth quarter will be $96 per barrel, and the Urals discount to Brent is expected to decrease due to a shortage of oil on the world market and the anticipated increase in its consumption at the end of the year. Currently, the discount is less than $14, indicating an improvement in the oil market.

If exporters do not increase their sales of foreign exchange earnings, the government has informally agreed to make the sale of such earnings mandatory. This is in an effort to increase the volume of currency sales.

In general, the exchange rate determines the amount of imports. When the ruble is weak, importers will not be as active due to the lack of economic profitability. Consequently, the demand for foreign currency from importers decreases.

The government intends to implement measures to limit speculative demand for the currency, which could lead to a decrease in intraday volatility in the foreign exchange market, thus making speculative trades less profitable.

It is anticipated by the bank that the dollar exchange rate will drop to between 85 and 90 rubles in the fourth quarter.

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