The ruble is preparing for a new collapse by the end of summer: Analysis and forecasts
The Russian national currency is on the verge of another phase of weakening. After a brief technical correction in July, which only partially compensated for the 10% drop in June, analysts expect a resumption of the downward trend. In July, exchange rates corrected by 3-5%, but this was only a temporary lull before the storm.
In my assessment, based on a deep analysis of market indicators, the current correction was a technical reaction to the previous collapse. However, the fundamental factors determining the ruble's exchange rate remain extremely unfavorable. The key driver is the imbalance between the inflow of currency from exporters and the growing demand from importers, exacerbated by the budget rule that stimulates currency purchases.
Target levels for the end of summer
My calculations point to the following benchmarks by the end of the summer season:
- US Dollar: a return to June highs and above, up to the 80 ruble mark.
- Euro: stabilization around 90 rubles.
- Chinese Yuan: approaching the 12 ruble level.
These figures reflect not just a technical pullback, but a fundamental shift in the balance of power in the currency market. Demand for currency is steadily exceeding supply, and this gap will only widen.
Seasonal factor: August — the month of ruble weakness
Seasonality deserves special attention. August is historically the weakest month for the ruble. This is due to the specifics of the trade balance: imports traditionally grow, increasing demand for currency, while export revenues stagnate, reducing supply. As a result, foreign currency exchange rates show steady growth in August.
What should investors do?
In the current situation, investors should consider strategies for hedging ruble risks. The most obvious options:
- Direct purchase of currency or futures on it;
- Investments in foreign currency bonds, which will not only protect against devaluation but also bring coupon income that will increase as the ruble weakens.
As for the launch of the digital ruble, scheduled for September 1, this event, in my opinion, will not have any significant impact on the national currency's exchange rate. The digital ruble is just a new form of circulation, not a new economic factor. The market understands this perfectly well.
My expert conclusion: The ruble is entering a zone of increased volatility with a clear downward trend. August will be a stress test for the Russian currency, and current fundamental factors suggest that this test will be failed. Investors should prepare in advance for the ruble's weakening, using currency protection instruments.