With the new ruble: what awaits the Russian currency in the first quarter of 2025
At the end of the year, the ruble exchange rate turned out to be quite stable - which is not the case with its dynamics. Numerous shocks in 2024, including the suspension of dollar and euro trading at the Moscow Exchange, a key rate hike and unexpected sanctions led to roller-coaster-like jumps. As a result, the ruble weakened 10% against the dollar and just 6% against the yuan. That nevertheless had a negative impact on attempts to curb inflation. Whether the decline of the Russian currency will continue next year and how the exchange rate will behave in the first three months of 2025 - in the next quarterly poll of Izvestia experts.
The most serious event of the year on the currency market was the US sanctions against the Moscow Exchange, which led to the fact that for the first time since 1992 the dollar was no longer quoted on the stock exchange. Instead, all settlements were transferred to the interbank market. The rate was announced by the Central Bank at the end of the next trading day. Yuan became the main trading currency of the exchange. Strangely enough, but it did not have a big effect on the exchange rate.
The most interesting events took place in the last quarter of the year. The sanctions against Gazprombank, through which a significant part of Russia's foreign trade transactions passed, became a turning point. Within two weeks, the dollar was down more than 10% (20% at the beginning of the year). Then, however, the situation stabilized. A new push, much smaller, occurred at the end of December, when the Bank of Russia suddenly decided not to raise the key rate. Normally, this should have led to a weakening of the ruble, but in fact the opposite happened - against both the dollar and the yuan.
At the end of the year, the ruble only slightly gave up its positions. Taking into account inflation in Russia and the United States, the real exchange rate against the dollar became only a couple of percent lower than the indicator of the beginning of the year. The yuan weakened against the ruble by this metric. This was largely due to the still good foreign trade situation, with Russian exports significantly exceeding imports, which have mostly recovered, but not completely.
Russian experts tried to predict the further behavior of currencies, which at the moment looks dependent on many conditions at once.
"The balance of risks is in favor of a weak ruble"
Natalia Pyrieva, leading analyst of "Tsifra Broker"
Traditionally, the main factors that affect the dynamics of the ruble exchange rate are trade and balance of payments indicators. In the current realities, the issue of cross-border payments and the currency structure of Russia's foreign trade payments will also play an important role. In addition, the external geopolitical background, Russia's economic situation, and the level of the key rate will certainly play a certain role.
The growth of the trade balance is a positive factor for the ruble and vice versa. We believe that the growth of exports will be limited in 2025 against the backdrop of continued sanctions pressure and potential deterioration in the oil market and lower prices for black gold (we focus on this market, as oil and gas revenues account for about 65% of all exports and 30% of all budget revenues). At the same time, the volume of imports will remain at a high level due to Russia's still high dependence on imported goods and services. Thus, according to our estimates, the balance of risks is in favor of a weaker ruble.
The operations of the Ministry of Finance and the Bank of Russia have a certain influence on the ruble - the growth of currency sales by the Bank of Russia creates additional supply on the market, but it is by no means a significant factor, and the share of the Bank of Russia's operations on average is about 1-2% of the average RMB trading volume.
Sales of foreign currency proceeds by exporters are no longer a strong factor, as now more than 40% of the currency structure of exports is ruble-denominated. At the moment exporters have to credit only 40% of currency under foreign trade contracts to authorized banks, and the norm of sales was reduced from 50 to 25% in October. Today this is an insignificant amount, and the subsequent weakening of currency control will lead to an even greater reduction in the importance of this mechanism within the framework of ruble exchange rate regulation. This tool was effective as long as the prevailing share in international settlements was occupied by "unfriendly" currencies, and today it no longer makes sense, so it seems quite logical to gradually weaken currency control, which will make life easier for exporters.
Keeping the key rate high is a supportive factor, but it is not the most important one either, but the transition to monetary policy easing may put pressure on the ruble in the second half of 2025.
In 2025, we expect the trend of gradual weakening to 110-115 rubles per USD, 115-120 rubles per EUR, 14.5-15.5 rubles per Yuan by the end of the year with localized attempts to strengthen.
"The most important intrigue is in the geopolitical plane"
Alexander Shepelev, stock market expert of "BKS Investment World"
The dollar in Q1 may move around the round mark of 100, more often gravitating to double-digit levels, we expect 13-14 rubles for the yuan with a higher probability of movement to the lower boundary. At the beginning of the year, the pressure from December seasonality will subside, when there is a surge in consumer, corporate and budget spending, as well as an increase in demand for foreign currency from those traveling abroad. Besides, the first quarter is usually characterized by a high current account surplus, which is fundamentally favorable for the ruble.
At the same time, monetary conditions in Russia will almost certainly remain tight during the quarter and the dollar will remain strong in the global market, especially if Donald Trump realizes his tariff and fiscal policy promises.
The most important intrigue of the beginning of the year lies in the geopolitical plane. Movement towards de-escalation of the Ukrainian conflict, dialog in terms of arms control, and possible sanctions easing could significantly improve sentiment towards ruble assets - both equities and the ruble. However, of course, it would be wrong to take this factor into account with a plus sign for the coming months, as the path to solving a complex geopolitical problem may not be easy and fast.
We expect the dollar to average 101.5 rubles and 104.5 by the end of 2025. The yuan may average in the region of 13.5-14.5 rubles.
"Trump's policy may put pressure on the ruble"
Alexander Potavin, analyst of FG "Finam"
The dynamics of the ruble exchange rate is usually determined by the factor of supply-demand of currency on the market. That is, on the one hand, it is the volume of sales of export foreign currency earnings, and on the other hand - the purchase of currency by importers, businesses and households. The data on Russia's trade balance for the fall months confirmed that the ruble weakening at that time was due to the worsening situation with the supply of free currency on the market.
If we add to this the permanent capital outflow from the country, a situation with a shortage of currency could well have been formed. The Central Bank managed to curb this situation by refusing to buy foreign currency on the market until the end of the year. But the situation may change again in January, if the Central Bank decides to buy foreign currency for reserves again.
However, the ruble has fundamental factors that will restrain its weakening in the coming year: high interest rates; restrictions on currency outflow from Russia, high volumes of settlements in rubles for imports; positive trade balance of the Russian Federation.
We expect the dollar/ruble exchange rate to trade in the range of 98-106 in Q1 2025. If oil prices fall next year due to the new US president's policy or Russian exports decrease, this will put pressure on the ruble. In case the risk of rapid devaluation grows, the government may again raise the norms of mandatory currency sales by exporters.
Volatility in the exchange rate of the Chinese yuan may increase next year if Donald Trump decides to impose increased trade duties on Chinese imports to the United States. We expect the yuan to weaken against the dollar, but relative to the ruble, the yuan exchange rate in Q1 2025 will probably be in the range of 13.3-14.5 rubles.
