The first week of June turned out to be relatively stable for the ruble to the dollar exchange rate, which in the past three months demonstrated intense swings akin to a roller coaster ride. It has now stabilized at 61-63 rubles per dollar and 63-66 per euro.
Vladislav Petlenko, Investment Director of Sigma Global Management has shared his forecast on the ruble exchange rate in June with a daily periodical MK.
“In the wake of the Western embargo on Russian oil exports, world prices for black gold have soared, increasing export earnings from the sale of foreign exchange revenue, which will strengthen the ruble as long as restrictions on foreign exchange currency are in place.
A high exchange rate of the ruble is also bolstered by significantly reduced imports, however, as new import channels with Asian countries are established and logistics chains are rebuilt, the demand for dollars, euros, and yuan will increase. Further appreciation of the ruble would have a negative impact on the Russian exporters’ earnings and cash replenishment of the federal budget. The authorities will have to ease foreign exchange restrictions further and lower the threshold for the mandatory sale of foreign exchange earnings.
It is noteworthy that even now the period of mandatory sale of foreign exchange earnings is 120 days, which, in fact, provides exporters with a chance to postpone selling their earnings and wait for the next mitigating measures to be enacted.
It is quite likely that on June 10, the Central Bank will reduce the key rate by another percentage point to 10%. If this happens, the ruble would be able to trade in the range of 65-68 rubles per dollar. Foreign exchange interventions by banks that have not been sanctioned could boost the dollar against the ruble.
Now is probably the best time to buy dollars and euros, although one should remember that ability to use it in Russia is currently limited".
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