An expert predicts the Russian ruble will maintain its strength in the second half of July 2025, influenced by high interest rates, low import demand, and expectations of improved geopolitical relations. The Central Bank of Russia is anticipated to cut the key rate to 18% on July 25th.
Expert Forecasts Ruble’s Trajectory for Second Half of July
While August often marks a turning point for the currency market, 2025 may prove an exception due to ongoing geopolitical factors, with July still exhibiting trends from the preceding period. Mikhail Vasiliev, chief analyst at Sovcombank, shared his insights with Finance Mail regarding the ruble’s potential performance in the latter half of July.
“We anticipate that the ruble will remain strong in the second half of July, trading close to its current values, though much will hinge on geopolitical developments,” he stated. Vasiliev explained that several factors continue to bolster the Russian currency: elevated ruble interest rates, suppressed demand for foreign currency driven by low import volumes and capital outflow, the expectation of improved relations between Russia and the U.S., and daily yuan sales from reserves as part of budget operations, totaling 9.8 billion rubles.
Vasiliev elaborated that the high key rate enhances the attractiveness of ruble savings, with deposits yielding approximately 18-19% annually. Concurrently, this high rate dampens consumer and investment demand, subsequently reducing the need for imports and, by extension, foreign currency. He also noted that exporters are converting a larger portion of their foreign currency earnings due to the high key rate and optimism surrounding geopolitical improvements.
A potential negative factor for the ruble is the seasonal increase in demand for foreign currency as people travel abroad for summer vacations. However, the ruble is expected to receive support at the end of July from the tax period, which will see exporters more actively selling foreign currency to settle their budgetary obligations by July 28th.
Furthermore, Vasiliev added that the currency market will remain sensitive to updates on Ukrainian conflict resolution talks, assessing the risks of new anti-Russian sanctions, and monitoring the broader geopolitical landscape. He highlighted that despite a 6% decline in Brent oil prices, the ruble has strengthened by 23% against the dollar since the start of the year until mid-July. Oil prices are likely to stay within the $66-73 per barrel range in the second half of July, supported by tensions in the Middle East.
“We also anticipate a reduction in the key rate at the end of July. We expect the Bank of Russia to lower the key rate by 200 basis points to 18% at its upcoming meeting on July 25th,” he revealed.
According to the expert, a strong ruble primarily benefits importers and consumers, enabling them to purchase foreign goods at lower prices. A robust ruble also promises a quicker deceleration of inflation and a swifter reduction in the key rate. Conversely, an overly strong ruble is disadvantageous for both the budget and exporters.
“Overall, we believe the ruble can maintain its strength as long as a stringent monetary policy persists, expectations of geopolitical improvements remain, and Russian authorities refrain from implementing measures to weaken the ruble,” Vasiliev concluded.
In a baseline scenario, assuming no significant geopolitical changes, he predicted that in the second half of July, the ruble would trade within the following ranges: 10.6-11.3 per yuan, 76-81 per dollar, and 89-95 per euro.
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