Russian Currency Outlook Examined by Financial Analysts in August
Ruble Forecast: Modest Weakening in the Short Term, Significant Depreciation in the Long Term
The Russian ruble is expected to experience a modest weakening in the short term, trading around 81.74 against the US dollar (USD/RUB) by the end of Q3 2025. However, over the next 12 months (mid-2026), the ruble is forecasted to depreciate further toward approximately 87.21 USD/RUB [1].
This prediction is influenced by several key factors. The Bank of Russia's monetary policy shift, as evidenced by a 200 basis points reduction in the key interest rate to 18% in July 2025 [2][5], is intended to support economic growth but may lead to short-term currency weakening and inflationary pressure.
Inflation, which has been easing, supporting the rate cut, is expected to continue its downward trend. However, the central bank aims to return inflation to its 4% target by 2026. Tight monetary conditions are expected to continue through 2025 and ease gradually in 2026, affecting ruble stability [5].
Russia's economy, heavily energy-dependent, has faced challenges due to a strong ruble earlier in 2025, which reduced inflation but hurt energy sector competitiveness and non-energy industries due to high borrowing costs and weak demand. The central bank’s easing indicates acceptance of a weaker ruble to boost growth [2].
Geopolitical and trade factors also play a significant role. Russia-China trade settlements have shifted largely to the Chinese yuan, and currency interventions have been used to stabilize the ruble. Ongoing geopolitical risks and sanctions affect investor confidence and volatility [2].
In terms of market volatility and forecasts, exchange rate forecasts indicate only modest short-term ruble gains or losses, with a slight depreciation expected through late 2025 [3]. For EUR/RUB, forecasts suggest constrained volatility and minor fluctuations, implying relative stability in ruble valuation against the euro in the near term [4].
Impact on Mortgage Rates and Savings Instruments
Following the Central Bank's key rate reduction, market mortgage rates are likely to continue falling, but they will remain at effectively prohibitive levels for some time [8]. Yuri Eidinov, Director of Retail Business at "Tsifra Bank", suggests that mortgages could become more attractive if the key rate falls within the 7.5-8% range [9].
However, experts caution that the main risk to deposit yields is a scenario where inflation falls slowly or remains at its current level, and the Central Bank continues to ease monetary policy, causing credit rates to fall [10]. Yuri Eidinov recommends considering alternative savings instruments, particularly on the stock market, for clients who are cautious about the stock market and prefer to avoid it [6].
Alternative Savings Instruments
Bonds have an advantage over deposits in that they allow investors to profit from a decrease in the key rate, according to Yulia Marinis, investment advisor at Wealth IQ [7]. However, investing in real estate requires substantial financial resources [11].
Factors Affecting the Ruble
Several factors could negatively impact the ruble, including further reduction in the key rate, decrease in foreign exchange earnings of oil exporters, recovery in imports, high budget deficit, and escalation of sanctions pressure [12]. Mikhail Slutsker, director of "Audit", suggests that the dollar rate could reach 110 rubles again, but the timing is uncertain [13].
In sum, the ruble is expected to weaken modestly in the short term and more significantly over the next year, shaped primarily by monetary easing, inflation dynamics, economic structural challenges, and geopolitical considerations. The central bank’s policy aims at stabilizing inflation and supporting fiscal revenues, which will remain key determinants of ruble exchange rate trends [1][2][5].
[1] Source: Finam [2] Source: Vedomosti [3] Source: Alfa Bank [4] Source: Sberbank CIB [5] Source: Central Bank of Russia [6] Source: TASS [7] Source: RBC [8] Source: Finam [9] Source: Finam [10] Source: Finam [11] Source: Finam [12] Source: Finam [13] Source: Finam
Personal finance advisors might suggest alternative savings instruments due to the forecasted depreciation of the Russian ruble. For instance, Yulia Marinis, an investment advisor at Wealth IQ, recommends bonds as an option that allows investors to profit from a decrease in the key rate [7].
Investing in the Russian market could be beneficial considering the predicted weakening of the ruble, as it may provide opportunities for higher returns in the long term for those who can tolerate increased risk. However, the ongoing geopolitical risks and sanctions affect investor confidence and volatility, which should be taken into account before making any investment decisions.
