Russian rouble may reach 115-120 per US dollar by year-end – Reuters

The Russian rouble has fallen by over 24% since early August and is likely to continue weakening.

Source: Reuters, citing economic analysts

Details: The key driver of the rouble’s depreciation is significant capital outflow from Russia's stock market, which has dropped more than 20% since the beginning of the year. Investors are transferring funds from equities to deposits offering interest rates higher than the record-high 21% key rate set by Russia’s Central Bank.

Experts predict the rouble could fall to 115–120 per US dollar by the end of the year. They suggest the Russian government and Central Bank need to take measures, such as compelling exporters to sell more foreign currency and reducing government purchases.

Sanctions against Russia's financial sector also play a critical role, complicating foreign trade operations, particularly in the oil and gas industries, and causing a currency shortage. Despite this, stable oil prices allow exporters to benefit from the weak rouble.

Background:

• The weakening rouble has nearly pushed Gazprom’s share value down to US$1 per share.
• As of 27 November, the rouble-to-dollar exchange rate is approximately 109.

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