Freedom Finance Global analyst forecasts exchange rates for July 2024

At the beginning of July, at the end of the tax period, the price of the ruble may drop; This usually occurs at the beginning of almost any month; Traditionally, the Ministry of Finance will also announce the volume of foreign exchange purchases from the National Welfare Fund (NWF) in accordance with the fiscal rule. And since oil prices remained high in June, Russia obtained surplus foreign currency, so the Ministry of Finance can increase the volume of foreign currency purchases for the fund, but, according to the expert, it will only be yuan.

The ban on trading dollars and euros on the Moscow Stock Exchange may still affect over-the-counter and foreign exchange rates, to the extent that the supply of the currency will be high and its demand will decrease. Mandatory foreign exchange sales by exporters are still taking place, although most sales will be in yuan.

Population demand is weakening, as the dollar and euro are becoming increasingly “toxic” for Russians, and it is not entirely clear whether currency trading with the yuan will continue in Russia, as the People’s Bank of China may also fear secondary sanctions. Milchakova points out.

The Bank of Russia’s decision on the key exchange rate, which will be announced on July 26, will be important for the ruble. Freedom Finance Global suggests that the probability of increasing the key rate of the Central Bank of the Russian Federation in July by 1-1.5 percentage points is quite high. This may affect the strengthening of the ruble at the end of July, along with the tax period. Analysts also do not rule out the announcement of new US and EU sanctions against Russian companies, which could negatively affect the ruble in the short term. In this sense, during the month of July the ruble can suffer quite significant fluctuations, Natalya Milchakova summarized.