Central Bank of Russia puts discussion of ruble exchange rate forecast publication on hold until next monetary policy review

MOSCOW. Aug 21 (Interfax) - The Central Bank of Russia will continue to refrain from publishing the forecast range for the national currency exchange rate in the medium term.

The Central Bank has an understanding of the forecast exchange rate trajectory as part of it general macroeconomic forecast model, but it is not publicly disclosed, Central Bank Deputy Governor Alexei Zabotkin has said.

The main disadvantage of disclosing it is the risk that the market will interpret the forecast range as an implicit Central Bank target, while the regulator's monetary policy is based on inflation targeting. Zabotkin said at the end of 2023 that the Central Bank would decide in the first half of 2024 whether to publish the exchange rate forecast. However, in 2024, against the backdrop of dramatic changes in the currency market due to U.S. sanctions against the Moscow Exchange Group, the Central Bank decided to delay discussion of expanding the range of indicators published in the medium-term macroeconomic forecast for another year, until the draft monetary policy guidelines for the three-year period 2026-2028 are ready.

Ultimately, the regulator's position has not changed: the risks outweigh the benefits, the head of the CBR's Monetary Policy Department, Andrei Gangan, said.

"We have put this idea on hold for now. We just believe it will not do much good to publish it in current conditions. A lot of people will probably just interpret the exchange rate forecast incorrectly," Gangan said in an interview with Rossiyskaya Gazeta.

"But it might be published in the future. We'll analyze this as part of the Central Bank's next Monetary Policy Review," he said. This is not an immediate prospect: the Central Bank plans to conduct reviews every five years, and the last one was in 2021-2023.

Gangan reiterated the Central Bank's point that tight monetary policy contributed signficantly to the strengthening of the ruble's exchange rate in the first half of 2025.

"It's through several channels at once [that monetary policy affects the exchange rate]. Firstly, when interest rates on loans are high, Russians show less demand for goods, including imported ones, so demand for currency declines. Secondly, ruble assets become more attractive to individuals and businesses than foreign currency assets, so they prefer to save in rubles. In addition, if loans are expensive, then exporters prefer, among other things, to sell the currency they have already accumulated instead of borrowing in rubles to pay taxes and other expenses within the country. All this, on the one hand, reduces the demand for currency, and on the other hand, increases its supply and contributes to the strengthening of the ruble. That's why we saw the ruble strengthen steadily in the first half of 2025, and this was primarily to do with tight monetary policy," he said.

The ruble weakened briefly at the end of last year against the backdrop of one-off factors, Gangan said. "The most significant of those were the latest sanctions in November, which temporarily reduced the inflow of currency into the country, and the peak car imports by car dealers, who bought more cars than usual ahead of the next increase in the scrappage fee, and demand for currency increased," Gangan said.

The scenario where one-off factors again significantly weaken the ruble "cannot be discounted entirely," so it is important to curb inflation and keep ruble savings attractive, he said. "If this condition is met, then any surge in demand from consumers during periods of turbulence will not be too strong, and the rate will stabilize following some fluctuations," he said.