A dollar is cheaper than 66 rubles. When will the Russian currency start falling again?

The price of oil has broken through $80 and is approaching $81 for the first time since November 2014. Today, the ruble has finally noticed the rise in oil prices - the Russian currency is worth more than 66 rubles/$ for the first time since the beginning of August. If news about new sanctions does not come from the United States, then the strengthening of the ruble should continue in the near future, but by December it may give way to a fall.

• Oil is rising on news of the decision of the OPEC+ consortium not to increase production and on expectations of new US sanctions against Iran, which come into force in November and limit oil exports from the country. Oil traders Trafigura and Mercuria believe that a barrel of Brent could rise to $100 in the fourth quarter of 2018.
• If we do not take into account the unpredictable factor of new US sanctions, then the ruble will continue to grow along with oil, and in the coming days the strengthening of the Russian currency may accelerate due to another peak in tax payments by Russian companies, says Raiffeisenbank analyst Denis Poryvay - he does not rule out that by the end of the week the ruble will break through the level of 65 rubles/$.
• Without bad news from the US, the strengthening of the ruble should last until the end of the year, analysts agree. Rip and Timur Nigmatullin from Otkrytie Broker Investment Bank, in the absence of strict sanctions, expect an exchange rate of 60 rubles/$, Sergei Romanchuk from Metallinvestbank allows the ruble to strengthen to 50–55 rubles/$.
• But in December, two threats await the Russian currency. Firstly, December will mark the peak of payments by Russian companies on external debt ($13.2 billion out of $26 billion in the fourth quarter), Raiffeisenbank analysts note in their report. Much will depend on the behavior of the largest exporters, who no longer have to sell foreign currency earnings in Russia, adds Denis Poryvay. For example, if Gazprom has to finance the construction of Nord Stream 2 alone, it will have to leave more foreign currency earnings abroad - this will certainly create pressure on the market, the expert argues.
• The second factor of pressure on the ruble in December may be expectations of the Central Bank returning to the foreign exchange market. Against the backdrop of a sharp fall in the ruble at the end of August, the regulator stopped purchasing foreign currency on the market according to the “budget rule” and promised not to return to this practice until the end of the year. The Central Bank's currency purchases throughout the year were the most important determining factor in the ruble exchange rate, says Timur Nigmatullin: in the first half of the year, the regulator bought 60% of all foreign currency received into the country ($30.6 out of $53.2 billion). Before the new year, speculators will begin to prepare for the return of the Central Bank in advance, and in this case, the fall of the ruble is inevitable, Nigmatullin concludes.

What's in it for me?

If there are no surprises, the ruble will strengthen during this week. From the beginning of October, when there is only a month left before the US elections, the likelihood of news about sanctions will increase. And by the end of the year, we can expect the ruble to weaken due to other factors.

Petr Mironenko