The Ministry of Finance of the Russian Federation will expand the sale of foreign currency by 85%, which will support the ruble

The budget rule for June 7th will result in a 1.8x increase in daily foreign currency sales.

The Russian budget will receive less than 44 billion rubles in additional oil and gas revenues for the month of June.

There was a disagreement among experts as to whether the ruble could drop below 80 per US dollar.

Rosbank predicts that the dollar could drop to 75 rubles by the end of the third quarter.

The Ministry of Finance of the Russian Federation announced on Monday that from June 7 to July 6, they plan to allocate 74.6 billion rubles for the sale of foreign currency under the budget rule. This would equate to a daily volume of currency sales of 3.6 billion rubles.

Since May 10, the Ministry of Finance has been selling foreign currency for 40.4 billion rubles, with a daily sales volume of 2 billion rubles. This June, the daily sales volume will increase by 1.8 times, and the total sales volume will rise by 85%.

On January 13, 2023, the resumption of operations for the purchase and sale of foreign currency (yuan) in the domestic foreign exchange market as part of the implementation of the fiscal rule mechanism was announced, following its suspension in March of the previous year. During this period, only the sale of foreign currency was allowed due to a decrease in budget oil and gas revenues by half.

For the period from January to May 2023, the federal budget received 2.854 trillion rubles from the oil and gas industry, compared to 5.658 trillion rubles for the same period in the previous year. This resulted in a budget deficit of 3.424 trillion rubles for the four months, which is higher than the annual plan of 2.925 trillion rubles.

Promsvyazbank believes that the ruble has potential for a short-term appreciation to 80 against the dollar. This could be driven by LUKOIL's increased activity in the market due to dividend payments.

Otkritie Investments predicts that the ruble may continue to weaken this week, but not to the extent of any drastic changes in its value. On the other hand, Russian Standard Bank does not anticipate the ruble to drop below 80 per dollar this week.

Rosbank believes that there is still potential for the ruble to strengthen from its current level. They predict that the dollar exchange rate could drop to 75 rubles by the end of the third quarter and 74 rubles by the end of the fourth quarter.