Russian Central Bank's Currency Operations Plan Leads to Ruble Strengthening
The announcement by the Russian Central Bank regarding its plans for currency operations in the second half of 2024 caused a sharp increase in the value of the ruble on Thursday, June 27. Natalia Milchakova, a leading analyst at Freedom Finance Global, noted that while a weakening of the Russian currency may follow, a significant drop should not be expected.
The analyst highlighted that the regulator will conduct mirror operations amounting to 8.4 billion rubles per day, depending on the volume of currency purchases or sales by the Ministry of Finance under the budget rule.
"This is approximately 29% lower than the regulator's currency operations in the first half of the year, which amounted to 11.4 billion rubles per day. Nevertheless, for the ruble exchange rate, it is positive that the Central Bank of Russia will continue to sell currency by mirroring Finance Ministry transactions," explained Natalia Milchakova.
She noted that even if in July the Ministry of Finance increases its currency purchases under the budget rule to the May level of 5.5 billion rubles per day, the Central Bank of Russia, through mirroring operations, will remain a net seller of currency.
According to her forecast, in July, the ruble is not expected to fall below 13 rubles against the yuan, 93 rubles against the dollar, and 100 rubles against the euro. The exchange rate for the yuan is expected to fluctuate between 11.8 and 12.3 rubles, the dollar between 86 and 90 rubles, and the euro between 92 and 96 rubles.
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