Ruble slides to one-year low against dollar, euro

Analysts attribute the drop to a simultaneous recovery in imports and decline in exports

The Russian ruble has fallen to its lowest exchange rate against the US dollar and euro since last April, data from the Moscow Exchange showed on Thursday.

The currency dropped to around 81 rubles to the dollar around 10:55 GMT, the weakest rate since April 11, 2022. The ruble also slid to over 88 against the euro, the lowest since April 6 last year.

The continued decline of the ruble against Western currencies stems from a simultaneous rise in imports and decline in exports, Anton Kravchenko, head of the equities department at First management company, told RBK news outlet. Lower foreign currency revenue inflows from exports have caused a deficit in the state budget, exacerbated by the outflow of the currency as companies build new supply chains to buy more products from abroad.

Kravchenko added that the ruble may also be weakening due to increased demand from banks, which are restoring their currency positions after the recent payment on Russian Eurobonds.

Other experts attribute the drop in the ruble’s exchange rate to a reduction in hard currency sales from the National Wealth Fund due to rising oil prices.

“We believe that the potential to test the range of 80-81 rubles against the dollar is technically possible, but… we do not rule out a dollar correction in the future,” Yegor Zhilnikov, chief economic analyst from Promsvyazbank, told the news outlet.

Overall, experts believe that a market correction is necessary for the dollar to consolidate above 80 rubles.

READ MORE: Russia has lost confidence in US dollar – finance minister

Earlier, Minister of Economic Development Maxim Reshetnikov explained that the optimal rate for the Russian economy is between 70 and 80 rubles per dollar. He said a stronger ruble could be a challenge for the economy, as it could make Russian exports less competitive.

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