In Russia, the dollar exchange rate rose above 85 rubles for the first time in nearly a year
The Russian Central Bank set the ruble exchange rate for August 18 at 85.01 rubles per dollar. The last time the official dollar exchange rate was above 85 rubles was in September of last year, and the yuan’s was in February of last year. On Monday, they rose against the ruble by 0.6% and 0.7%, respectively, and since their May lows, the dollar has gained 20% and the yuan 23%.
Due to sanctions and counter-sanctions, the ruble exchange rate no longer reflects international investors’ sentiment regarding Russia’s economic outlook and is determined almost exclusively by domestic supply and demand for the currency, according to analysts at the Bank of Finland. Due to settlement difficulties, export proceeds reach Russia with a lag of 1.5–2 months, according to the Central Bank’s assessment, and foreign currency from transactions in late June and early July—when prices for oil and other Russian exports were at a local low—is now entering the market.
The ruble continues to face pressure from limited currency supply from exports, notes Dmitry Babin of BCS World of Investments. Already in July, net currency sales by exporters, according to the Central Bank, fell by 20% compared to June.
At the same time, demand for foreign currency is rising, Babin adds. The vacation season is taking its toll—this year, Russians’ spending abroad is nearing the record levels of 2014. In July, according to the Central Bank, Russians purchased 97 billion rubles worth of foreign currency, and 523 billion rubles worth since the beginning of the year. The fuel crisis is also having an impact: the government has banned the export of petroleum products, and the total volume of Russian oil exports in July fell by 5% year-over-year. Russia has switched to importing gasoline, and imported supplies are also needed to repair damaged refineries, Babin notes. Finally, the currency “continues to be viewed by many as a safe-haven asset amid growing geopolitical uncertainty,” he concludes.
Despite the decline in recent weeks, the ruble exchange rate is still about 30% higher than at the end of 2024; in July, it averaged 78 rubles per dollar—roughly the same as a year earlier, according to analysts at the Bank of Finland.
Most forecasts currently project an exchange rate of 85–90 rubles per dollar by the end of the year.
As a reminder, the Russian ruble began August with yet another decline. On August 7, the dollar’s exchange rate on the over-the-counter market exceeded the 83-ruble mark for the first time since late March, reaching 83.01 rubles.
The Russian ruble continued to weaken and, at the start of trading on August 4, fell to its lowest level since early April. The ruble’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.
