“Dollar at 100”: the ruble weakened to August values

On the Moscow Exchange, the Russian ruble, as of 07:00 Moscow time, was trading at 100 rubles per dollar, the euro approached 104.95 rubles. This is the first time this figure has been achieved since mid-August.

The Russian currency continues to weaken after the Central Bank raised the rate and introduced trade restrictions, say experts quoted by RBC.

Analysts indicate that the ruble began to decline in the last week of September. They remind you that until September 28, businesses had to transfer basic fees to the state: VAT, income tax, personal income tax and insurance premiums. The end of this tax period weakened the ruble in the short term. Stable domestic demand, business settlements with non-residents for assets, a high share of foreign trade payments in rubles and the currencies of friendly countries, restrained volumes of energy exports, and delaying discussions of government measures capable of balancing the market are also cited as reasons for the weakening.

Let us recall that in August the dollar exceeded the level of 100 rubles for the first time since the spring of 2022; as a result, the Central Bank increased the key rate from 8.5% to 12%. A month later the rate was raised to 13%. However, the effect associated with increasing the key rate, experts are sure. Other measures affecting the exchange rate were also introduced, including export duties, which will be linked to the dollar exchange rate; they will affect a wide range of goods. A ban on the export of petroleum products was also introduced – from September 21.

In general, since the beginning of 2023, the position of the Russian ruble against the dollar has weakened by 40%. At the same time, the Russian currency remains undervalued by 15-20%, which is associated with the purchase of assets from non-residents and the possible accumulation of foreign currency for such transactions, analysts add, believing that this gives reason to expect continued weakness in the Russian currency in October.