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- Growth points: the war in the Middle East and the reduction of foreign currency in the Russian Federation strengthened the dollar
Growth points: the war in the Middle East and the reduction of foreign currency in the Russian Federation strengthened the dollar
The energy crisis caused by the conflict in the Middle East has led to the strengthening of the dollar. The US currency has been rising for several days now. Today, on March 19, it rose above 87 rubles on the Russian interbank market. The last time the dollar was at this level was in April 2024. However, experts attribute the increase in the value of the dollar not only to the situation on the energy market, but also to a sharp reduction in the supply of foreign currency in Russia. However, in their opinion, it is too early to talk about a transition to a long trend towards a weakening of the ruble. What will happen to the dollar in the future is in the Izvestia article.
Upward trend
On Thursday, March 19, the dollar exchange rate on the Russian interbank market rose above 87 rubles for the first time since April 10, 2024. This is evidenced by the bidding data. As of 11:04 Moscow time, the value of the US currency increased to 87.44 rubles. By 11:14 Moscow time, the dollar's growth rate had adjusted to the level of 85.72 rubles.
Following the American currency, the European currency also rose in price. At 11:04 a.m., the euro exchange rate increased by 1.31% to 97.29 rubles. By 12:06 p.m., the price had crossed the 99-ruble mark for the first time since September 22, 2025. By 12:17 Moscow time, the euro exchange rate rose by 1.44 rubles relative to the previous close, to 98.04 rubles. And a few minutes before that, it rose to 100.10 rubles, exceeding a psychologically significant level.
Fluctuations in the foreign exchange market also affected the average dollar purchase rate. It reached 84.21 rubles in banks and exchange offices in Moscow, which is the maximum value for the month. Thus, the average purchase rate of the American currency increased by 5.96 rubles during this time.
By the way, the dollar is strengthening its position not only in relation to the Russian currency. The dollar index (DXY), which is a traditional indicator of the strength of the US currency, has been growing since the beginning of March. Moreover, such dynamics is also observed for currencies that have recently strengthened against the dollar. Among them, in addition to the ruble, are the Swiss franc, the Brazilian real, the South African rand and the Chinese yuan.
Internal factors
The current jump in the ruble's exchange rate against the dollar is primarily caused by the suspension of the budget rule, which the Ministry of Finance of the Russian Federation decided to resort to in early March, and lower sales of the currency by exporters, says Ksenia Bondarenko, associate professor at the Department of World Economy at the Faculty of World Economics and Politics at the National Research University Higher School of Economics. The general strengthening of the US dollar, which can be seen in the dynamics of the DXY, also played an important role.
Alexander Dzhioev, an analyst at Alfa Capital Management Company, also considers the suspension of currency sales by the Ministry of Finance in March against the background of the upcoming budget rule change to be a key factor in the observed weakening of the ruble.
— Previously, these operations were a significant source of currency supply — for example, in February, the market received about 11.9 billion rubles in equivalent daily. After the Ministry of Finance suspended sales on March 6, the volume of foreign currency liquidity decreased, and this immediately affected the exchange rate: from that moment on, the dollar rose in price by more than five rubles, the expert claims.
Additional pressure is generated by concerns about the new oil cut-off price under the budget rule, the Izvestia interlocutor clarifies. It is determined when the Ministry of Finance buys currency into the National Welfare Fund (NWF) or sells it from it.
— All other things being equal, the reduction in the cut-off price means that the Ministry of Finance will start buying foreign currency from the National Welfare Fund at lower oil prices than currently budgeted. Consequently, the volume of demand for the currency will increase. And vice versa: a reduction in the cut—off price will lead to a lower volume of currency supply compared to the current volume in the case of low actual oil prices," he explains.
A sharp reduction in the supply of currency in Russia has become a significant factor in the weakening of the ruble against the dollar, confirms investment adviser to the registry of the Central Bank, founder of the online investment university "Financology" Yulia Kuznetsova.
— In February, the largest exporters reduced net sales of foreign currency earnings by 31% to $3.5 billion. This is the minimum in recent years," the expert draws attention to.
At the same time, in January, the net sales of the largest companies amounted to $ 5.1 billion. And on average in 2025, this figure was at the level of $8.1 billion, Dzhioev recalls.
— While the Ministry of Finance continued to sell the currency, the reduction was not so noticeable, but after the suspension of interventions, the influence of this factor on the exchange rate increased, — the analyst believes.
In addition, it should be borne in mind that net currency sales by the Central Bank have decreased to about 4.6 billion rubles per day since March 6, compared with 16.5 billion previously, adds Kuznetsova. At the same time, Russia's external balance weakened: the current account surplus fell to $0.4 billion in January from $2.8 billion at the end of 2025.
— Under these conditions, the move to 87 rubles per dollar is not a random tick, but a reflection of the deterioration of the currency balance and a decrease in support for the ruble. But it's too early to call this a new long trend: much will depend on whether high oil prices will remain and whether more active sales of export earnings will return, the investment adviser is convinced.
It is noteworthy that the ruble is getting cheaper, despite the sharp rise in oil prices. This is due to the fact that exporters, as a rule, do not immediately transfer foreign exchange earnings to the Russian contour, Dzhioev points out. Therefore, the support of the national currency from high oil prices is still limited.
At the same time, the expert does not expect the ruble to weaken further at the same pace. The exchange rate of the US currency at the end of 2026, according to his estimates, will be around 85 rubles per dollar.
The Quiet Harbor
The global strengthening of the dollar is directly related to the situation in the Middle East. It is important to keep in mind that the United States benefits from rising hydrocarbon prices because it is a major exporter, Ksenia Bondarenko recalls.
The Middle East crisis is working for the dollar through the classic flight to safety mechanism, which implies the withdrawal of capital into protective assets, notes Yulia Kuznetsova. The escalation of the conflict has brought back demand for the dollar as a defensive currency, and at the same time the market began to invest less in anticipation of a reduction in Federal Reserve rates.
— Plus, the conflict has accelerated oil: the price of Brent rose above $119 per barrel today, and disruptions through Hormuz and attacks on energy infrastructure have increased inflationary risks worldwide. When oil and geopolitics raise inflationary expectations, markets begin to expect a tougher Fed policy — and this additionally supports the dollar, which is growing not only as a "safe haven", but also as the currency of a country where the rate is likely to remain high for longer, the investment adviser explains.
Investors' flight from risk amid the escalation in the Middle East implies, among other things, the purchase of US government bonds, Bondarenko admits. Despite the growing debt burden (according to the US Treasury Department on March 17, the country's gross debt almost reached $39,017 trillion), these securities still remain a popular protective asset.
New sanctions and tariff increases may turn the situation around and provoke a weakening of the dollar, the economist does not exclude.
"In the medium and long term, this means an increase in debt burden and government debt payments, as well as an increase in transactions outside the dollar (among developing countries)," she warns.
At the same time, a possible weakening of the dollar is not a baseline scenario in the short term, Kuznetsova draws attention to.
"The dollar may weaken if de—escalation begins in the Middle East, oil moves down, and data on inflation and the US economy will again convince the market that the Fed will still be able to lower the rate," the expert says.
An additional negative for the dollar could be political conflicts over the budget and the debt ceiling of the United States or a noticeable deterioration in confidence in the American fiscal trajectory, she continues.
"But for now, the market sees rather the opposite: in the stress phase, the dollar again behaves more strongly than most currencies, including traditional safe havens," the Izvestia interlocutor points out.
The debt pit
The situation with the US government debt, despite its growth, remains stable. Developing countries, including the largest holders of American treasuries (US government bonds), are systematically reducing their investments in the national debt of the United States, which negatively affects the stability of the "dollar pyramid," says Ksenia Bondarenko.
— But it is important to keep in mind that for the United States, the entire national debt is essentially domestic. If necessary, they can print more papers and find buyers. If not abroad, then within the country for sure," the economist notes.
Developing countries are now purposefully increasing the volume of trade in national currencies and reserves not in dollars, but the share of alternative currencies is still very low, the Izvestia interlocutor clarifies.
— And a default in the United States will happen only if everyone abruptly abandons the dollar, including investors inside the country. And this is unlikely to happen," she believes.
Over the long horizon, individual countries are indeed diversifying their reserves, reducing investments in American securities, confirms Yulia Kuznetsova. However, recent data does not confirm the thesis of a mass exodus from US government bonds.
— In January 2026, foreign investments in U.S. government bonds, on the contrary, increased to $9.305 trillion from $9.271 trillion a month earlier. Japan and the UK have increased their positions. Even China has slightly increased them compared to December. Therefore, I would not talk about the imminent collapse of the dollar system due to the "dumping of treasuries". Rather, we are talking about slow diversification, rather than a panic outcome," the investment adviser emphasizes.
The direct link "high debt = near default or hyperinflation" in the case of the United States oversimplifies reality, the expert warns. The United States does have a huge debt, and the Congressional Budget Office expects the federal budget's net interest costs to exceed $1 trillion as early as 2026. But the risk of default in the United States has historically been associated not with a shortage of dollars per se, but with a political conflict over the debt ceiling and budget decisions.
At the same time, there is no fixed threshold for the cost of servicing the US government debt, at which the Fed will "turn on the printing press" and collapse the dollar, says Kuznetsova.
— The Fed focuses on inflation, the labor market, financial stability and market functioning, and not on the convenience of financing the Ministry of Finance. The Fed's balance sheet is still huge, but since 2022 it has not increased in the logic of emergency quantitative easing. On a longer scale, it was about $6.5 trillion by the end of 2025. Therefore, the scenario "the Fed is forced to launch unlimited issuance, and the dollar collapses against all currencies, including the ruble," today looks not basic, but extreme," explains the financier.
Izvestia's interlocutor calls the real risk for the dollar not an instant collapse, but a gradual destruction of trust if the United States maintains a high deficit, expensive debt and political instability for a long time.
"But even in this scenario, the ruble does not have to strengthen automatically: for the Russian currency, its own balance of payments, exports, budget rules and geopolitics are more important," concludes Kuznetsova.
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