What Events to Expect in the Currency Market
The key event of the working week from December 16 to 20 will be the Central Bank's meeting. An increase in the interest rate from 21% to 22-23% per annum is anticipated. This decision is reasonable given the current inflation dynamics. In November, inflation accelerated to 1.43%, and the annual figure reached 8.88%, significantly exceeding the target of 4%. The head of the Central Bank, Elvira Nabiullina, has already emphasized that the process of slowing inflation will extend throughout 2025 and partially into 2026. These points were noted by financial analyst Vladislav Antonov from BitRiver.
However, according to his estimates, the impact of the key rate increase on the ruble's exchange rate will be limited. The main reason is the existing structural problems associated with Western sanctions. Sanction pressure severely complicates international settlements and the return of foreign currency earnings. This is a fundamental factor that will have a much more significant impact on the exchange rate than yet another increase in the key rate.
— Most market participants and analysts anticipate another increase in the key rate at the upcoming Central Bank meeting to levels of 22-25%. The very expectation is a strengthening factor. This will immediately affect the deposit and lending markets. Banks will raise rates on ruble deposits, resulting in increased demand for the ruble, which is a strengthening factor for the national currency, — said Alexander Shneiderman, head of the client support and sales department at "Alfa-Forex."
Nevertheless, he stated that the ruble will face increasing pressure over time, as the available pool of support measures from the Bank of Russia, such as the cessation of foreign currency purchases, is becoming exhausted.
Among the factors strengthening the ruble, Alexander Shneiderman added that the significance of exporters' earnings is increasing as the main way to replenish the Russian market with foreign currency (the deficit becomes more evident due to sanctions against Gazprombank). The end of the month is traditionally a period for tax payments, which raises demand for the domestic currency. Overall, the situation has managed to stabilize.
What Will Happen to the Dollar Rate Next Week
Vladislav Antonov believes that the dollar will continue to trade within its broad range of 99-111 rubles next week. Until Wednesday, the resistance level was 105 rubles. Since the European Union has adopted the 15th sanctions package against Russia, as reported by Hungary as the EU Council president, the level should be raised to at least 108.
— The euro will fluctuate in the range of 104.5-112.5 rubles. The yuan will remain around 13.4-14.4 rubles. This relatively stable scenario is due to the recent measures taken by the Central Bank. Among them are the suspension of foreign currency purchases and the maintenance of currency sales operations at a volume of 8.4 billion rubles daily. I believe the Central Bank has the tools to stabilize the ruble's exchange rate and keep it below 105, — considers Vladislav Antonov.
He emphasized that the current situation in the currency market is determined not so much by the Central Bank's monetary policy as by geopolitical and sanctions-related restrictions. The Bank of Russia is balancing between the need to curb inflation and maintain relative stability of the national currency.
— It is quite clear that in the early part of the second half of December, the dollar will remain in the corridor of 95-105 rubles, the euro within 100-110 rubles, and the yuan in the range of 13-14.5 rubles, — said Alexander Shneiderman.
Before the Bank of Russia's meeting, the dollar's benchmark remains in the range of 105-115 rubles, for the euro it is 111-121 rubles, and for the yuan, the relevant corridor will be 14.6-15.9 rubles. This forecast was made by chief analyst Oleg Kalmanovich from Neomarkets.
— The situation with the ruble remains unstable. In my opinion, the dollar to ruble exchange rate will fluctuate in the range of 98-110, accompanied by high volatility, especially towards the end of the year. The end of the year is traditionally a weak period for the ruble. Therefore, it is likely that we will remain in this range until January, — said Denis Astafiev, founder of the investment company SharesPro.
According to him, market participants are already factoring in the anticipated rate increase and are preparing for it in advance. A key moment will be the results of the Central Bank's meeting and Elvira Nabiullina's address. Her statement will be decisive for the future direction of monetary policy.