Why the dollar-ruble exchange rate is falling. Parsing
On February 12, the dollar fell to 93.90 against the ruble for the first time in four months. Euro and British pound have also strengthened against the dollar in recent days. At the same time, the Central Bank rate on February 13 was 94.05 rubles per dollar. What caused the weakening of the U.S. currency and whether this trend will be long-term - in the analysis of "Izvestia".
What happened
- The official dollar exchange rate fell below 94 rubles for the first time since October 2024. The ruble strengthened against the backdrop of lower imports and the expectation of decisive actions of the new US administration to hold negotiations to end the conflict in Ukraine.
- Meanwhile, European currencies the British pound and the euro also strengthened against the dollar this week. Although the changes are less noticeable and fit into the general trend of volatility of the U.S. currency, the foreign press notes that the policy of U.S. President Donald Trump is expected to be moderately inflationary, in addition, the rise in prices in the States was affected by the consequences of wildfires in California, and therefore, we can expect a slight depreciation of the national currency of the country.
Weakening of the dollar
- One of the reasons was a slight weakening of the U.S. currency. It can be explained by the anxiety of investors after Trump made the next steps in the "tariff war". Earlier, he threatened to impose duties of 25% on goods from Canada and Mexico in violation of the North American Free Trade Agreement (NAFTA), and signed an executive order imposing tariffs of 10% on products from China in violation of World Trade Organization (WTO) rules. Beijing responded with duties of 15% on coal and liquefied natural gas from the US. Later, the head of the White House announced duties of 25% for countries-exporters of steel and aluminum, which are scheduled to come into force on March 12. This time not only China and Canada, but also the European Union were hit.
- Trump's tariff policy was not approved domestically, because in case of shortage of raw materials, companies will have to either reduce production or pass the costs on to consumers. Because of the steel duties, the automobile production and the construction sector will suffer first of all. Demand for construction increased after natural disasters - floods and fires, but the imposed duties may further raise housing prices and increase the risk of rising unemployment, and unfavorable labor market and inflation expectations, in turn, weaken the dollar.
- Federal Reserve Chairman Jerome Powell said on Feb. 11 that the fundamentals of the U.S. economy are stable and unemployment has reached a minimum, but inflation in the country remains elevated and therefore the Fed will not revise the key rate. The continued high rate also contributes to the decline in the value of the dollar.
Strengthening of the ruble
- There are enough reasons for the decline in the dollar, but the price of the asset could also be affected by the usual volatility in the market, determined by a whole complex of factors, from which it is difficult to single out one thing. According to the Central Bank of Russia, the strengthening of the ruble is explained by the adaptation of market participants to new channels of settlements for foreign trade transactions, as well as the growth of foreign currency sales by exporters and households.
- Experts believe that the Central Bank's policy of strengthening the ruble before the seasonal spike in food inflation in early spring also played its role. The trend for strengthening of the national currency may continue until early summer. Another factor influencing the ruble growth is the beginning of the negotiation process on the settlement of the Ukrainian conflict.
When preparing the material, Izvestia talked to and took into account the opinions of:
- economist Alexei Rodin;
- economist Vasily Koltashov;
- independent analyst, trader and asset manager Dmitry Demidenko.
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