Currency market volatility: what’s happening in December? December traditionally brings increased activity to Russia’s financial markets. During this time, currency exchange rates become more dynamic due to seasonal growth in consumer activity and changes in fiscal policy. The country’s economic system, having adapted to new conditions after the events of 2022, shows resilience despite external challenges. The domestic market and partnerships with other countries have become key factors in maintaining stability. Export flows remain high, even amid a moderate budget deficit. This helps keep the currency market balanced in terms of supply and demand.
Inflation and Central Bank policy: impact on the ruble
As the holidays approach, inflation is rising in Russia. This is driven by increased consumer spending and traditional bonus payments in the public sector. In response, the Bank of Russia has decided not to further ease monetary policy, keeping the key interest rate at 16.5%.
Economists predict that in 2026 the rate may gradually fall to 13-15%, provided GDP growth remains in the range of 0.5-1%. This cautious policy by the regulator helps prevent sharp fluctuations in the ruble and makes investments in the national currency attractive for investors.
Supporting factors include the mandatory sale of export earnings in foreign currency and the Central Bank’s active interventions in the market. However, the ruble is under pressure from the need to import critical goods and restrictions on the repatriation of profits by foreign companies.
Dollar, Yuan, and Ruble: Forecasts and Key Factors
According to experts, after its autumn peak, the dollar exchange rate will remain within the range of 79-83 rubles. The ruble’s trajectory will be determined by the balance between support from high interest rates and interventions, and the need to finance imports.
Import dependence continues to pose risks to the national currency. Despite progress in import substitution, certain industries still require significant foreign currency spending, which is covered by the National Wealth Fund. Additionally, limited profit repatriation by foreign companies contributes to capital outflow.
The Central Bank continues to respond swiftly to changing circumstances, smoothing out potential currency fluctuations. However, declining export revenues, falling oil prices, or increased budget spending at year-end could intensify pressure on the ruble and push the dollar higher.
Yuan Gaining Ground: China’s Expanding Role in Settlements
The yuan holds a special place in transactions between Russia and China. This currency has become the main medium for international operations between the two countries. Its exchange rate is influenced not only by the trade balance but also by the policy of the People’s Bank of China, which strictly controls the dynamics of the national currency.
A positive trade balance with China maintains demand for the yuan among Russian companies. The ability to use bank cards from both countries for settlements helps to strengthen economic ties. It is expected that the yuan’s exchange rate will remain stable until the end of the year, not exceeding 12-13 rubles, while interest in this currency will continue to grow.
Overall, experts believe that Russia’s currency market will remain relatively balanced through the end of 2025. The main risks are related to external shocks and changes in the structure of exports and imports. Market participants will be closely watching the regulator’s actions and global commodity price trends.
