The dollar exchange rate has exceeded 108 rubles. And here's why

The Central Bank of Russia has set the official dollar rate at the level of 108 rubles. Such values were last seen in 2022. Due to the tense political situation in the world, the fall of the national currency may continue for some time, according to economists. About what caused the fall of the ruble - in the material "Izvestia".

Economic reasons

- On the fluctuations of the ruble in the short term affects the ratio of exports and imports. In the market there was a shortage of foreign currency in the conditions of compression of export revenues caused by falling prices for goods supplied by Russia, while the demand for imports has not decreased in the same proportions. The more foreign sanctions affect Russian exports, the longer it will take for the national currency to weaken. One of the most recent factors affecting exports was Austria's refusal to supply natural gas.

- Economists expected the ruble to weaken in the medium to long term due to the current inflationary backdrop. The presence of higher inflation in one economy than in another ultimately influences one currency to weaken against another. This can happen either gradually or in sharp spikes. The process will continue until inflation stabilizes at a level commensurate with other economies.

- Also, the volume of additional supply of foreign currency by exporters decreased due to the relaxation of requirements for repatriation and compulsory sale of foreign currency export proceeds. In mid-November, the mandatory sale was reduced from 50% to 25%. This measure helped strengthen the national currency in the past, but deprived exporters of the foreign currency proceeds they needed. Now they can hold more currency without injecting it into the Russian economy.

- The seasonal factor coincided with all these phenomena. Traditionally, before the New Year holidays imports grow, increasing the demand for foreign currency on the part of importers. Combined with the fall in foreign currency earnings, this creates additional pressure on the ruble.

Impact of the political situation

- The current balance of exports and imports may also have been affected by the US sanctions against Gazprombank, which led to a restriction on the inflow of foreign currency proceeds. Secondary sanctions generally hamper international transactions. Tougher control over compliance with the sanctions regime on the part of Russia's friendly partners leads to a reduction in trade volumes and a rise in the cost of commissions for cross-border settlements. Ultimately, this increases the shortage of currency in Russia. This factor will continue to affect the value of the ruble until other, more reliable ways of mutual settlements are found.

- The ruble's weakness against the U.S. currency is also a consequence of the strengthening of the dollar itself in the global market after the election of Donald Trump as U.S. president. The last strengthening of the dollar against world currencies occurred in late November after the politician directly announced his intention to impose tariffs on goods from Canada, Mexico and China.

Forecast for the ruble exchange rate

- According to experts, the ruble exchange rate will continue to fall slowly in the coming years. Possible jumps and slowdowns of quotations, but in the medium term, this process will continue until inflation falls to commensurate with global values. The nearest benchmarks are 115-120 rubles per dollar, after which further weakening is not traceable.

More than a hundred to one: the ruble exchange rate will consolidate around 105-107 per dollar by the end of the year

Why is the Russian stock market falling and what can support the national currency and company shares?

- The fact that in 2025 the world oil prices are expected to decline due to the reduction of industrial production in Europe and China and the fall in demand for hydrocarbons also speaks against the strengthening of the ruble in the near future. Besides, Trump directly claimed that he intends to expand oil production in the U.S. and lower oil prices. At the same time, Trump may be associated with some hopes of easing geopolitical tensions, which will help the Russian economy and shift the trade balance towards exports.

- To stabilize the ruble exchange rate, exporters need to find new opportunities for mutual settlements instead of Gazprombank, which has fallen under U.S. sanctions. The Russian economy has shown in recent years that it can adapt to such challenges and find ways to make payments.

- For now, we should not expect an intervention in the near future that will bring the ruble-dollar exchange rate back below 100 rubles. The Bank of Russia could strengthen it by selling foreign currency reserves. However, now its efforts are aimed not at maintaining the national currency, but at fighting inflation. Besides, the Central Bank advocates the refusal to regulate the ruble, declaring a market rate based on the balance of supply and demand.

- For the time being, the Bank of Russia has decided not to buy foreign currency on the domestic foreign exchange market by the budget rule until the end of the year in order to reduce volatility on the world markets - usually the suspension of such operations stops the fall of the ruble.

In preparing the material Izvestia talked to and took into account the opinions of:

• Nikolai Kulbaki, candidate of economic sciences;
• economist, director of the Institute of New Society Vasily Koltashov;
• Igor Didenko, member of the International Union of Economists.