The Russian ruble under pressure: a new wave of decline expected by the end of summer
After a short-term technical correction in July, the Russian ruble is once again coming under pressure from fundamental factors. My calculations and analysis of market dynamics indicate that by the end of summer, we will face another wave of weakening of the national currency. The June drop of 10% was merely a prelude.
The July pullback of 3-5% is not a trend reversal, but only a temporary respite before a new round. The market is preparing for the dollar to return to its June highs around 80 rubles, and the euro to around 90. The yuan, in turn, could approach the level of 12 rubles. These figures are not mere speculation, but the result of analyzing the balance of supply and demand in the foreign exchange market.
Fundamental Reasons for Pressure on the Ruble
The key driver of the ruble's weakening is the imbalance between the inflow and outflow of currency. On the one hand, export revenues are stagnating, reducing the supply of currency on the market. On the other hand, imports continue to grow, fueling demand. Add to this the budget rule, which amplifies currency purchases, and you get a classic picture of demand exceeding supply.
This imbalance is particularly pronounced in August. The statistics are relentless: this is historically the weakest month for the ruble. Imports traditionally peak during this period, while export flows slow down. As a result, demand for currency surges, supply shrinks, and this pushes exchange rates higher.
Strategy for Investors
In anticipation of the expected weakening of the ruble, I see several rational strategies for preserving capital. Direct purchase of currency or futures on it is the most obvious move. An alternative could be currency bonds: when the exchange rate rises, they not only appreciate but also generate coupon income, making them an attractive tool for hedging risks.
An important point: the upcoming launch of the digital ruble, scheduled for September 1, will have no impact on the national currency's exchange rate. This is merely a new form of settlement, not a monetary policy tool. The market understands this perfectly.
My professional opinion: The current correction in July creates only an illusion of stability. The ruble remains hostage to macroeconomic imbalances, and August statistics will likely confirm this negative forecast. Investors should diversify their portfolios in advance to minimize currency risks.