The ruble fell to its lowest level since April due to oil prices and a decline in export revenue
The Russian ruble continues to weaken and, at the start of trading on August 4, fell to its lowest level since early April. The Russian currency’s exchange rate was affected by a decline in export revenues, the previous day’s drop in oil prices, and rising demand for foreign currency.
According to data from international trading platforms, the dollar’s exchange rate on the Forex market rose to about 80.8 rubles, marking a further 0.5% loss following the ruble’s nearly 1% decline on Monday.
The dollar/ruble pair is trading near 80.80 rubles per dollar, while the euro is trading at around 92.05 rubles. The Russian currency has strengthened slightly against the euro following a significant drop the previous day.
At the same time, the ruble is also losing ground against the Chinese yuan. On the Forex market, the exchange rate is ranging between 11.45 and 12.25 rubles per yuan, while trading on the Moscow Exchange closed near 11.94 rubles per yuan, marking the weakest level since late March.
An additional factor contributing to the ruble’s weakness was the sharp drop in the price of Brent crude by nearly 7% following statements by U.S. President Donald Trump regarding the possibility of negotiations with Iran instead of further military escalation.
However, the very next day, Brent prices partially recovered, rising by about 1.4% to $84.9 per barrel, as investors continue to assess the risks to energy supplies from the Middle East.
Meanwhile, Russian Urals crude fell by just over 2% and remains near its summer highs, which could potentially support future foreign exchange earnings from exports.
Analysts note that at the beginning of each month, the Russian currency traditionally weakens due to a decline in the sale of export foreign exchange proceeds following the end of the tax period. This year, this effect has intensified following exporters’ payment of the quarterly tax on additional income (NDD).
Additional negative pressures on the ruble exchange rate include:
- uncertainty regarding Russia’s foreign trade due to the war against Ukraine;
- fluctuations in export and import flows;
- rising demand for foreign currency;
- the lack of positive signals regarding an end to the war;
- deteriorating investor sentiment and rising demand for safe-haven assets.
Experts note that even a slight increase in demand for foreign currency in the illiquid Russian market can significantly affect the ruble exchange rate, which remains sensitive to external economic and geopolitical factors.
As a reminder, in one of the most prestigious areas of the Moscow region—Rublyovka—long lines have formed at gas stations due to a fuel shortage. Videos of traffic jams near gas stations are being shared by local residents.
The Kremlin has issued guidelines on how to report on the gasoline shortage.
The fuel crisis in Russia is intensifying: gasoline is running out at gas stations and lines are growing.
