Econ Ministry expects peak ruble strengthening by June 2024 at 87.5 rubles/$1 and 97.5 rubles/EUR1 - macro forecast

MOSCOW. Sept 26 (Interfax) - The Economic Development Ministry expects the ruble exchange rate to gradually strengthen in Q4 2023 and in H1 2024, reaching a peak in June 2024, after which trends will change and the ruble will swing to gradual weakening, according to figures in the Russian socio-economic development forecast for 2024-2026 (approved by the government on Friday) seen by Interfax.

According to the ministry's forecast, in December 2023 the exchange rate will be around 94.3 rubles/$1 and 105 rubles/EUR1, by June 2024 the ruble will strengthen to 87.5 rubles/$1 and 97.5 rubles/EUR1. At the same time, according to the Economic Development Ministry, the euro will be under 100 rubles for only 5M - from May to September 2024.

In December 2024, the rate is expected to be 91.7 rubles/$1 and 102.3 rubles/EUR1.

"By the end of 2023, the pressure on the trade balance and the ruble exchange rate from foreign trade will gradually weaken. Since June, there has been a turnaround in the situation on the world commodity markets - rising prices for oil and a number of other export commodities. In turn, the increase in foreign currency inflows to the current account along with the ongoing diversification of its currency structure will contribute to the strengthening of the ruble exchange rate in late 2023 - H1 2024. From mid-2024, the rate of the Russian currency to the dollar will stabilize in the range of 90-92 rubles/$1," the ministry's forecast indicates.

Russian Economic Development Ministry is forecasting the average annual dollar exchange rate in 2023 at a level of 85.2 rubles/1$, while the 2024 rate is estimated at 90.1 rubles, the 2025 rate at 91.1 rubles, and the 2026 rate at 92.3 rubles.

The average annual euro exchange rate is forecast at 93.4 rubles/EUR1 in 2023, 100.4 rubles in 2024, 102.0 rubles in 2025 and 103.8 rubles in 2026.