December 6, 2022



Ruble in October: uncertainty increases


In September, the ruble felt confident, especially when paired with the single European currency: by the end of the month, the “Russian” rose against the dollar by 0.19%. But against the euro, the ruble rose powerfully, by 2.6%, forcing the euro to drop to almost 84 rubles – a minimum that has not been seen since the summer of 2020. The price of Brent oil showed an impressive rally over the month, soaring by 10% and exceeding $78 per barrel. The strengthening of the ruble is mainly restrained by the spread of a new wave of the coronavirus pandemic in Europe and in Russia itself.

On October 4, a meeting of OPEC+ member countries will be held, at which the issue of increasing oil production beyond the previously reached agreements on a monthly increase in production by 400 thousand barrels per day can be considered. It is unclear what the outcome of the meeting will be. If a decision is made to increase production, the oil price in October may drop again to $74-76 per barrel, but if the member countries of the oil alliance confirm the previously reached parameters of the deal, the probability of a rise in the price of Brent to $80 per barrel and above will increase significantly. An increase in the oil price will contribute to the continued strengthening of the ruble, and its downward correction may, in turn, contribute to a downward correction of the Russian national currency.

On October 22, the Central Bank of the Russian Federation will announce a decision on the key interest rate. We do not rule out another increase in the key rate by 0.25-0.5 percentage points – from the current 6.75 to 7-7.25%. We believe that the regulator will not consider other options (keeping the rate unchanged and even more so reducing it), since in September the weekly consumer price inflation again showed acceleration.

The ruble may react to an increase in the key rate by strengthening.

Unfortunately, the threat of a new wave of the coronavirus pandemic will be relevant again for the ruble in October. It should be noted that earlier the World Health Organization warned about a new, stronger wave of a pandemic this fall around the world. Although we do not expect new lockdowns, as it was in the spring of 2020, but new point restrictions for certain types of business (for example, related to attending mass events) are not excluded, and if events develop in this way, it will create a negative background for the ruble.

We forecast in October the dollar-ruble exchange rate within 71-75 rubles, and the euro-ruble exchange rate is expected in the range of 84-88 rubles.