What is Happening in the Currency Market at the End of November
The ruble has fallen to yearly lows due to a combination of negative factors. Firstly, there is a powerful rise of the global dollar against all world currencies, reaching highs not seen since November of last year. Secondly, the intensified geopolitical situation has led to some investors withdrawing from ruble-denominated assets. Thirdly, there is a shortage of currency liquidity amidst infrastructural barriers. This was reported by the expert from the stock market of "BCS World of Investments," Mikhail Zeltsar.
— Currently, there is a clear trend in the market for the ruble to weaken, but a significant portion of the devaluation is driven by emotions: amid uncertainty, the risk premium rises, and the discount on domestic financial instruments temporarily increases. This is a speculative overlay, and as the situation normalizes and market participants calm down, a technical correction of the overheated foreign currencies will occur, — he added.
The easing of the monetary policy by the American financial regulator is always accompanied by increased interest in dollars, activating investors and companies that take out cheap loans. The dollar is also present when establishing cross-rates in other currency pairs. Valery Tumin, a member of the Expert Council on the Development of the Digital Economy under the State Duma Committee on Economic Policy, emphasized this point.
— All market participants are focused on geopolitical tensions. Additionally, the recent U.S. sanctions against the leadership of the Bank of Russia and the financial sector remained significant factors putting pressure on the ruble on Friday. The approaching peak of tax payments on November 28 is unlikely to have a substantial impact on exchange rates at the achieved levels. At the same time, the seasonal increase in demand for imports at the end of the year and rising budget expenditures will continue to exert pressure on the Russian currency, — believes financial analyst Vladislav Antonov from BitRiver.
What Will the Ruble Exchange Rate Be from December 1
The ruble may receive support during the week of November 25 due to the November tax period — the supply of currency from exporters will increase, stabilizing the ruble. The market is still volatile, and currencies are rising due to inertia, but without any unforeseen circumstances, the likelihood of the dollar returning to double-digit levels is high. Such a forecast was made by Mikhail Zeltsar.
— The dollar's exchange rate is likely to drop below 100 rubles due to the tax period at the end of the month, meaning exporters will actively sell their currency earnings, thereby increasing demand for the ruble. It can also be assumed that due to the expensive dollar, the volume of earnings will be higher than anticipated. In any case, the Bank of Russia will strive to return the exchange rate to a comfortable range of 90–100 rubles, established in the budget, which aligns with the interests of exporters and importers, — stated Valery Tumin.
The pressure on the Russian currency is exerted by the escalation of geopolitical factors and the strengthening position of the dollar in the international currency market. Next week, the dollar is expected to be in a probable range of 102–106 rubles. This forecast was made by Alexander Shneiderman, head of the client support and sales department at "Alpha-Forex."
— In the short term, there are risks of further weakening of the ruble, as there are currently no fundamental factors for sustainable strengthening. If the dollar's exchange rate consolidates above psychologically important levels (105 rubles per dollar or 14 rubles per yuan), regulators may introduce additional currency control measures. Increased volatility is expected at the beginning of winter. The trading range for the dollar is projected to be within 97.00–107.50 rubles. Three-digit dollar values are becoming a new reality, — noted Vladislav Antonov.
In his opinion, a key event at the end of the year will be the December meeting of the Central Bank, where a possible increase in the key rate to 23% is anticipated. Although such a decision may provide temporary support to the ruble, it will negatively impact business activity, especially in the small and medium-sized business segment.