Assessment of the Russian Ruble's Future Outlook by Financial Experts in August
The Russian ruble, which has been relatively stable in recent months, may face some challenges in the coming months due to several key factors.
According to Yuri Eidinov, Director of Retail Business at "Tsifra Bank", the main risk to deposit yields is a scenario where inflation declines slowly or remains at its current level, and the Central Bank continues to ease monetary policy, leading to lower lending rates. This could reduce the attractiveness of ruble-denominated assets to investors, potentially weakening the ruble and accelerating inflation.
One of the primary factors that could contribute to this scenario is the Central Bank's decision to lower its key rate. After the Central Bank's latest meeting, "Finam" analysts forecast the key rate to continue decreasing, possibly by 200-300 basis points, in response to seasonal deflation and lower inflation.
Another significant factor is the continued and intensified US and EU sanctions against Russia. These sanctions restrict Russia's access to global financial markets and undermine the artificial demand for rubles created by mandatory currency conversion rules for exporters. This weakening of ruble demand could reduce the currency's value.
The decline in energy export revenues is another challenge facing the ruble. Oil and gas exports make up about 30% of Russia's federal budget. With oil prices averaging around $59/barrel, instead of the higher anticipated prices, the ruble faces downward pressure, and this budget shortfall limits fiscal support and weighs on the currency.
The broader Russian economy also shows signs of contraction and stagflation, with stubbornly high inflation and reduced domestic demand. High real interest rates have pressured non-military sectors, leading to weaker overall growth, budget deficits, and potentially less confidence in the ruble.
In August-September, importers typically increase foreign currency purchases ahead of year-end, which may temporarily weaken the ruble—especially if the currency remains overvalued relative to inflation and economic fundamentals.
However, not all analysts are pessimistic about the ruble's future. Mikhail Slutsker, director of "Audit", suggests that current levels can be attractive for long-term currency buyers, as factors of weakening currently outweigh those of strengthening.
Yulia Marinch, an investment advisor at Wealth IQ, offers an alternative strategy for investors. She advises creating a portfolio of a mix of foreign currency bonds and OFZs to earn from the dynamics of the rate and the weakening of the ruble when it starts.
In summary, while the ruble's recent strength has been supported by tight capital controls, high interest rates, and trade surpluses, these supporting factors face increasing headwinds from policy easing, sanctions, energy revenue declines, and economic strain that could lead to a weaker ruble in the near term. Investors may want to consider diversifying their portfolios to mitigate these risks.
Personal-finance advisor Yulia Marinch suggests that investors create a portfolio of a mix of foreign currency bonds and OFZs to earn from the dynamics of the rate and the weakening of the ruble when it starts, demonstrating an interest in investing in response to potential challenges facing the Russian ruble.
The continued application of US and EU sanctions, the Central Bank's decision to lower its key rate, and the decline in energy export revenues are key factors that could contribute to a weaker ruble, potentially making personal-finance strategies like those suggested by Marinch more attractive to investors.
