Russian Rouble Forecast for 2025

By Elena Fabrichnaya and Gleb Bryanski

MOSCOW (Reuters) – The Russian rouble is expected to continue trading at around 100 roubles per U.S. dollar at the start of 2025, gradually weakening to 108 by the year's close, according to a Reuters poll of 10 economists conducted on Friday.

The rouble hit a low not seen in about 2-1/2 years in November due to new U.S. financial sanctions on Russia. However, it has recovered some value since then following intervention from the central bank.

Most analysts now see the 100 mark against the dollar as a new equilibrium level, anticipating stabilization in foreign trade transactions disrupted by sanctions. Additionally, other factors are expected to provide some support for the rouble.

Analysts pointed out that the first quarter of the year typically favors the rouble since factors like imports, overseas travel, and external debt payments tend to decrease.

Recently, the rouble fell to 103.7 against the U.S. dollar after the central bank announced plans to withdraw some support for the currency during the first week of 2025 following the New Year break.

Predictions indicate the central bank will maintain its benchmark interest rate at 21% throughout the first half of 2025. This comes after an unexpected decision on Dec. 20 to keep rates unchanged.

Mikhail Vasilyev from Sovcombank stated, "We expect the central bank to keep the key rate at 21% at the meeting on Feb. 14. We believe lending will continue to slow, aligning with the regulator's forecast for 2025."

To combat inflation, which is anticipated to be at 9.8% this year, Russia's central bank has raised its key interest rate to the highest level in over 20 years. Excessive government spending is contributing to concerns over economic overheating.

GDP growth is estimated at 3.9% for 2024, slightly above earlier predictions of 3.8%. However, for 2025, growth is expected to slow sharply to 1.6%, due to the central bank's monetary tightening policies.

Inflation rates are projected to decline to 6.6% by the end of next year, moving closer to the central bank's target of 4%. This may enable the bank to lower its benchmark rate to 18% in Q4 of 2025.