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Peter Davis

An writer at FOMOdrive

  • Aug 02, 2023
  • 2 min read

What awaits the ruble in August and when to buy currency?

By the end of July, the ruble had weakened against the dollar, euro, and yuan.

By the end of the month, the dollar exchange rate rose by 2.3%, to 91.60 rubles per dollar, the euro by 3.1%, to 100.80 rubles, and the yuan by 3.9%, to 12.81 rubles.

As August arrives, it is traditionally a time of peril for the Russian currency.

On Monday, the Ministry of Finance's Siluanov stated that the possibility of controlling the ruble exchange rate is not being contemplated by his department.

Historically, August has not been a good month for the ruble, due to geopolitical upheavals, dividend payments, and the holiday season. Data since 1994 shows that the dollar has appreciated against the ruble in 75% of Augusts. This situation is further exacerbated by the sharp decline of the Russian currency's exchange rate in recent months.

Sovcombank notes that the supply of foreign currency on the Russian market has decreased due to a reduction in the surplus of the current account of the balance of payments of the Russian Federation. Despite this, the demand for the currency remains high for the purchase of imports, foreign summer holidays, as well as due to geopolitical, budgetary and inflationary risks. The bank predicts that the dollar will be traded in the range of 88-95 rubles in August.

The Russian Agricultural Bank believes that the chances of the ruble exchange rate rising above 92.5 per dollar are quite high, and it is possible that the rate could even reach 94.8–95 rubles.

In August, despite the turbulence and pressure in the media, we are expecting the dollar to drop below the 90 rubles/$ mark and the USD to quickly fall to the 88-87 rubles/$ range. This is the minimum plan, and BCS is optimistic that by autumn, foreign trade flows will normalize. Additionally, expectations of a rate hike by the Central Bank of the Russian Federation could also help support the ruble.

Zenit bank believes that the Central Bank of the Russian Federation will be selling additional foreign currency from August 1 as part of the investment of funds from the NWF on the side of the ruble.

It is anticipated by MKB Investments that the ruble will appreciate by up to 5% in the month of August.

According to a survey conducted by RIA Novosti, analysts of investment companies and banks anticipate that the ruble will strengthen against the dollar, euro and yuan in August. The dollar exchange rate is predicted to decrease by 1.3 rubles to 90.3 rubles, the euro by 1.5 rubles to 99.3 rubles, and the yuan by 15 kopecks to 12.65 rubles.

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