Ruble forecasts: short-term appreciation, long-term depreciation

In the first quarter of 2026, the Russian currency market experienced one of the most volatile phases since 2022. Despite higher prices for Russian oil, the rouble depreciated to 86.9 roubles per US dollar and around 100 roubles per euro in March. Only since the beginning of April has there been a countermovement and the rouble has appreciated: 76 roubles per US dollar and just under 90 roubles per euro. In the next one to two months, the rouble exchange rate is likely to continue to rise in value, as budget revenues only reflect the oil price with a time lag. Mikhail Vasilyev, chief analyst at Sovkombank, puts the time lag between the oil price and foreign currency income at around one and a half months. Urals at 13-year high: ruble with a delay Two factors are driving the appreciation. The price of Russian Urals oil rose to as much as 116.05 US dollars per barrel in April - almost double the budgeted price of 59 US dollars and a 13-year high. In parallel, the Ministry of Finance has suspended its foreign exchange operations under the budget rule until July 1, 2026 to prepare for planned adjustments. The effect: surplus oil and gas revenues will no longer be stored in the National Welfare Fund, but will remain in Russian circulation. From the March low to the April high Central bank chief Elvira Nabiullina also explained the ruble's weakness in March with the time difference between the oil price and foreign currency receipts: "In March, we see the consequences of the relatively low oil price in January. The volatility of the Russian currency is due to a combination of the low oil price in January and February and the suspension of the budget rule, under which the Ministry of Finance bought or sold foreign currency." Alexander Golovtsov, head of the analysis department at the Russian Promsvyazbank, quantifies the additional foreign currency supply: "Without intervention by the Ministry of Finance, an increase in supply of between USD 5 billion and USD 10 billion per month can provide strong support for the rouble exchange rate. A short-term appreciation to 70 roubles per dollar cannot be ruled out." Natalja Waschtschelijuk, senior analyst at Perwaja, one of the largest Russian asset management companies, expects a corridor of 82.5 to 88.5 roubles per euro in the coming weeks. On March 20, the Russian central bank cut the key interest rate by 50 basis points to 15%; the consensus of analysts surveyed by the daily newspaper Izvestia expects a further cut to 14.5% at the next meeting on April 24. Devaluation in the second half of the year After the first quarter, the budget deficit of 4.576 trn. roubles (41 billion euros), the budget deficit has already exceeded the legally fixed annual target of 3.786 trillion roubles (33 billion euros) by 21%. roubles (33 billion euros) by 21%. Sofia Donez, Chief Economist at T-Investments, believes that a dollar exchange rate of RUB 94.5 by the end of the year is likely: "A devaluation of the rouble in 2026 is probable and economically justified," she says. Natalia Orlova, chief economist at Alfa-Bank, explains: "Overall, I assume that the rouble will stabilize in the range of 80 to 85 roubles per dollar by the end of the year." Economy Minister Maxim Reshetnikov warned at the stock exchange forum in mid-April that the rouble would "remain stronger for several years than many would like". Oleg Vyugin, former deputy head of the Central Bank, openly named the tension between the ministries: "There is a - albeit rather conspiracy-theoretical - variant, according to which the government is basically betting on weakening the rouble. This would allow budget revenues to be replenished by devaluing the rouble." Elena Koshukhova from the investment company Weles Kapital names two possible triggers for a coming rouble weakness: a substantial oil price correction or a clearly looser tone from the central bank. The latter is more likely if the situation in the Middle East stabilizes by the time of the central bank meeting on 19 June, the expert said in an interview with the financial magazine RBC. Daria Tarasenko, senior analyst at Gazprombank's Center for Economic Forecasting, summarized the timeline: "The decline in export prices will affect the foreign exchange market in 2026. In the first half of 2026, this effect can be compensated by the high real interest rate and foreign currency sales by regulators, while in the second half of the year their contribution to exchange rate dynamics will increase." Mikhail Selzer, analyst at stock exchange trader BKS Mir Inwestizij, expects a rate "close to 100 roubles per euro" at the end of 2026.  The post Ruble forecasts: short-term appreciation, long-term depreciation appeared first on ostwirtschaft.de.