The ruble is preparing for a new collapse by the end of summer: analysis and forecast
After a short-term technical correction in July, which only slightly smoothed out the massive June losses, the Russian ruble is once again under pressure. My calculations and analysis of market data indicate that by the end of the current summer season, we can expect another wave of national currency weakening, with the scenario appearing almost inevitable.
Fundamental Drivers: Supply and Demand Imbalance
The key factor determining the ruble's exchange rate is the balance between currency inflows and outflows from exporters and importers. At the moment, I am recording a steady excess of demand over supply. This is driven by several factors:
- August seasonality: The statistics are relentless—August is traditionally the weakest month for the ruble. Imports typically rise, creating increased demand for currency, while exports stagnate, reducing its supply on the market.
- Fiscal rule: The mechanism of currency purchases under the fiscal rule continues to exert additional pressure, amplifying the existing imbalance.
As a result, after a minor July pullback (by 3-5% on major currency pairs), which I view solely as a technical correction, the trend of ruble weakening will resume. My targets for the end of summer: the dollar—a return to June highs and above, up to the 80 ruble mark; the euro—around 90 rubles; the yuan—approaching 12 rubles.
What Should Investors Do?
In anticipation of the ruble's weakening, I recommend considering the following strategies to protect savings:
- Buying currency or futures on it: Direct purchase of dollars, euros, or yuan is the most obvious, but not the only, method.
- Currency bonds: As exchange rates rise, these instruments appreciate in value and provide coupon income, making them an attractive option for double benefits.
"The introduction of the digital ruble, scheduled for September 1, will have no impact on the national currency's exchange rate. It is merely a new form of circulation, nothing more," I emphasize, sharing the view of market experts.
My expert conclusion: The current correction is not a trend reversal, but a pause before a new round of weakening. Fundamental factors (seasonality, trade balance imbalance) unequivocally indicate that pressure on the ruble will persist. Investors wishing to preserve capital should already consider diversifying into currency or currency instruments, rather than waiting for the exchange rate to break new local lows.