Export and hope for peace: what will determine the ruble exchange rate in the second quarter

The first quarter of 2025 turned out to be extremely volatile for the Russian ruble, with a rise and fall of several percent per day being a common situation. In general, the strengthening of the national currency turned out to be the longest and strongest since the summer of 2022. The main reasons for this were the better-than-expected balance of payments and positive geopolitical news. These factors will determine the dynamics of exchange rates in the next three months. What will happen to the ruble in the near future is in a survey of experts from Izvestia.

Ruble exchange rate: causes of fluctuations

The ongoing negotiation process between Russia and the United States turned out to be extremely encouraging for the ruble exchange rate. In three months, the Russian currency has risen in price against the dollar on the interbank market and the yuan on the Moscow Stock Exchange by about 15-17%. Nevertheless, this growth was accompanied by powerful jumps in both directions. This clearly shows that it's not just about fundamental factors, but also about the sharply increased activity of speculators.

Nevertheless, objectively, the ruble should have been strengthening against the existing news background. The revision of statistics for the fourth quarter also added fuel to the fire, which showed that exports were significantly higher than expected by operational estimates. So did imports, but overall the trade surplus was significantly higher than expected.

Photo: IZVESTIA/Eduard Kornienko

This suggests that in the current difficult conditions, foreign economic relations continue to remain in the "fog of war", although, given the policy of the Central Bank's rates, it is generally expected that exports will grow faster than imports.

What's next? Most analysts believe that the ruble has strengthened too much and a correction awaits the domestic currency. Another question is what scale it will reach.

Income, but: a strong ruble will lead to a budget loss of almost 2 trillion

Will the exchange rate remain at 84 and why is it bad for the treasury

"The determining factor is speculation"

Alexander Potavin, Analyst at FG Finam

The determining factor for the dynamics of the ruble exchange rate in the first quarter was speculation with the ruble on the topic of negotiations to achieve peace in Ukraine. This promises the lifting of external sanctions against the Russian Federation, and may also attract foreign capital to Russia. However, the lack of progress and the worsening of the sanctions situation may upset foreign investors, and the ruble will show a more active weakening.

On March 31, the dollar exchange rate reached 86.4 rubles, which is 6.5% higher than the monthly lows shown on March 18 (81 rubles). The rate of change in the value of the Russian currency — despite the fact that fundamental factors did not change at that time — indicates a high speculative component, which is now present at the ruble exchange rate. This factor will remain decisive in the second quarter. If the negotiations progress, new waves of ruble appreciation are possible.

Photo: IZVESTIA/Anna Selina

It will also be important for the dynamics of the ruble exchange rate how the Central Bank will behave in terms of the key rate. If the disinflationary trend continues in the next couple of months, the regulator may ease monetary policy closer to the summer. In the old days, the ruble reacted by weakening to a reduction in the key rate.

Taking into account the factor of the spring inflow of foreign capital to Russia and the strengthening of the ruble against this background, we lower the forecast for the dollar exchange rate at the end of 2025 to 102-105 rubles — the dollar exchange rate is likely to rise to these values only by the end of the forecast period.

Photo: IZVESTIA/Eduard Kornienko

Our forecast for the second quarter for USD/RUB is trading in the range of 83-92 rubles. We expect that in the spring and early summer of 2025, the trading range for the yuan/ruble pair will be 11.2–12.8. The process of weakening the ruble against the yuan will probably be attributed to the second half of 2025. By the end of the year, we expect to see the yuan in the region of 13.3–13.7 rubles.

"Import recovery, export reduction"

Alexander Shepelev, Stock Market Expert at BCS World of Investments

The leading forces will remain geopolitics, the monetary policy of the Bank of Russia, as well as the export-import balance, which may shift against the ruble in light of a recovery in imports and a simultaneous reduction in exports. Also, closer to the holiday season, the physical demand for the currency may increase. We expect the dollar to move towards 90-95 by the summer, the euro to 96-97, the yuan to be above 12 rubles, and by the end of the year, exchange rates may be another 3-5% higher than indicated.

Deflation beyond the threshold: why prices may slow down sharply

All factors are stacked in favor of their reduction in one of the coming months.

"Cancel the sale of foreign currency earnings"

Natalia Pyrieva, a leading analyst at Digital Broker

The dynamics of the ruble exchange rate, as before, will depend on the balance of payments (exports and imports, current account balance), the volume of operations on the part of exporters, demand for Russian assets from foreign investors, operations of the Bank of Russia, the geopolitical background and the appearance of specifics regarding sanctions, unblocking accounts, etc.

Photo: IZVESTIA/Dmitry Korotaev

We expect that the spring export inflows of foreign currency to the country will be lower than the winter ones due to the deterioration of the price situation in the oil market since the beginning of the year and the expansion of discounts on domestic grades. At the same time, the demand for foreign currency from importers will begin to recover more actively after a seasonal decline at the beginning of the year. Thus, the current optimism about the ruble may gradually fade, so we are inclined to believe that in the second quarter the national currency will resume a moderate weakening trend in the direction of 90 rubles per dollar, 94 rubles per euro, 12.4 rubles per yuan.

Moreover, the combination of a strong ruble and cheaper oil in dollars is negative for the economy, as the country is losing oil and gas revenues, widening the budget deficit. Accordingly, if necessary, the financial authorities can intervene in the exchange rate formation of the ruble and, in particular, cancel the mandatory sale of foreign exchange earnings and suspend currency sales by the Bank of Russia.

Photo: RIA Novosti/Maxim Bogodvid

At the moment, the authorities are deciding not to resort to regulation, as they probably expect that the degree of volatility will gradually decrease by itself. At the same time, we do not expect a noticeable weakening of the ruble, since in the II–III quarters there are dividend payments, for which exporters can sell foreign currency earnings to generate ruble liquidity. This creates additional supply on the market and supports the ruble.

By the end of 2025, the ruble may weaken to 108 per dollar, 113 per euro, 13 per yuan.

Delayed impact: inflation will start to decrease only by autumn

Why are experts not as positive as the Central Bank in its last review before the "week of silence"?

"The holiday season against the ruble"

Pavel Biryukov, Chief Economist at Gazprombank

In the next quarter, we expect fundamental factors to strengthen: a possible reduction in foreign exchange earnings and a recovery in import demand may contribute to the ruble's weakening. Pressure on the ruble may further shape the approach of the holiday season: historically, this has contributed to an increase in demand for the currency from the population.

Photo: IZVESTIA/Eduard Kornienko

At the same time, it should be borne in mind that changes in the news background may continue to have a significant impact on the foreign exchange market and cause an increase in volatility.

According to our estimates, on the horizon of the quarter, the ruble exchange rate may weaken and turn out to be closer to fair levels of 13.2–13.7 per yuan, 96-98 per dollar. Over the next year, we expect the ruble to weaken, albeit more modestly than in 2024 (up to 5% versus 12.2%). This may be due to the fact that, in addition to compressing the foreign trade surplus, we also expect a reduction in the volume of foreign currency debt repayments. As a result, the ruble may reach levels of 103-105 per dollar and 14.3–14.5 per yuan by the end of the year.