Ruble to depreciate medium-term due to the declining current account surplus – Commerzbank

Economists at Commerzbank have revised their USD/RUB forecast path higher this month after the exchange rate weakened significantly and reached their end-2024 target of 90 already.

USD/RUB is currently solely driven by the current-account balance

Due to the sanctions, the RUB exchange rate now only reflects current account flows. Hence, the Ruble is likely to depreciate medium-term due to the declining current account surplus.

We now forecast 120 for end-2024.

Russia’s central bank (CBR) CBR has signalled that it is concerned about upside risk to inflation (partly a consequence of the weaker exchange rate), and will start a rate hiking cycle beginning its 21 July meeting. Rate hikes, however, do not have direct FX implications at this time.

Source: Commerzbank Research