Official dollar-to-ruble exchange rate drops to 70.95 rubles
The Bank of Russia set the dollar exchange rate for May 21 at 70.95 rubles, 35 kopecks lower than the previous value. The yuan exchange rate on the Moscow Exchange rose to 10.46 rubles.
The figure of 70.95 rubles per dollar may seem like a holiday for consumers, but for those who read the balance of payments, it's a wake-up call. We are witnessing a classic "Dutch storm": the currency is strengthening not due to economic efficiency, but because of a temporary windfall from commodity revenues that is about to collapse.
The essence: what is really happening
Formally, the exchange rate dropped by 35 kopecks and settled below the psychological mark of 71 rubles per dollar. But the essence of the event is not the number, but the mechanism behind it. The ruble strengthened to three-year highs solely due to the geopolitical premium in oil prices. The conflict in the Middle East and the effective closure of the Strait of Hormuz have driven the price of Russia's export crude Urals from a paltry $40 per barrel in January-February to $90-95 in April-May. This hot currency revenue flows into the domestic market with a lag of one and a half to two months — that's exactly what we are seeing now. Add to that the tax period: exporters are forced to convert currency to pay taxes, creating an excess supply of dollars and yuan. The ruble is strengthening not because Russia has become stronger, but because the supply of currency temporarily exceeds demand.
Timeline and context
The turning point was May 20, when the dollar exchange rate on Forex fell below 70 rubles for the first time since December 2023, reaching 69.9 rubles, before partially recovering. The yuan exchange rate on the Moscow Exchange rose to 10.459 rubles, indicating a correction after a prolonged strengthening. The official exchange rate from the Central Bank for May 21 fixed the dollar at 70.9509 rubles — the lowest since February 2023. In the second quarter, according to Bloomberg, the ruble became the world's strongest currency against the dollar.
This triumph of the national currency has a specific expiration date. Experts are unanimous: the ruble could begin to weaken as early as June-July. Here's why.
Who wins and who loses
At first glance, the winners are Russian consumers and importers. Imports of goods in the first quarter of 2026 grew by 10% year-on-year, reaching $73 billion. A strengthening ruble makes foreign goods and travel cheaper: the services balance deficit widened to $9 billion precisely due to increased spending by Russian tourists abroad.
But the main losers are the federal budget and exporters. The ruble strengthening to 70 per dollar deprives the treasury of up to $31 billion (2.5 trillion rubles) in nominal revenues on an annualized basis. The current account surplus shrank to $12 billion in the first quarter from $18 billion a year earlier. For grain and oilseed exporters, a strong ruble is a real disaster: their margins are already minimal due to high lending rates and excess global supply. In effect, the real sector is paying for the importers' party with its own income.
What the media are not telling
While headlines trumpet the ruble's records, one critically important mechanism that will determine the currency's movement in the coming weeks remains behind the scenes — the fiscal rule. Currently, the Ministry of Finance is buying currency for reserves at a paltry 1.2 billion rubles per day. But as early as June, the volume of purchases could increase manifold — to over 10 billion rubles per day. This means the state will begin actively withdrawing excess currency from the market, artificially weakening the ruble. The mechanism works like this: when oil sells above the cutoff price, authorities buy currency for reserves; when it's cheaper, they sell from reserves.
A non-obvious insight: expert forecasts about the end of the Middle East conflict by summer are not just geopolitical analysis, but a calculated expectation. As soon as the Strait of Hormuz opens, the price of Urals will collapse. Sovcombank is already factoring $60 per barrel into its Q4 forecasts, down from the current $90. The market, now euphoric about the strong ruble, is completely unprepared for this factor to disappear within 60-90 days. Moreover, in April, Russia's Producer Price Index (PPI) jumped to 5.5% year-on-year after -7.8% in the previous period — a swing of 13.3 percentage points. This means production costs are accelerating sharply, and the Central Bank may be forced to raise, not lower, the key rate. The combination of falling oil, rising cost inflation, and aggressive currency purchases by the Ministry of Finance is an explosive cocktail that the media completely ignores.
Forecast: next 30 days and 90 days
30 days (by June 21, 2026). Until the end of May, conditions remain for further ruble strengthening: the tax period continues, and high oil prices support currency inflows. A sustained drop of the dollar below 70 rubles and the yuan below 10 rubles is possible. But in June, the dynamics will change: the Ministry of Finance will sharply increase currency purchases under the fiscal rule, and the Central Bank will continue to cut the key rate (currently 14.5%). Add to that the seasonal increase in demand for currency from tourists. By the end of June, I expect the dollar to return to the range of 73-75 rubles.
90 days (by the end of August 2026). This is the moment of truth. If the Middle East conflict ends by summer, as experts predict, the price of Urals will begin to decline. Under the scenario of oil at $60 per barrel by year-end, the dollar will return to the range of 78-80 rubles, the yuan to 11.6-11.9, and the euro to 93-95. The key risk is a faster-than-expected drop in oil prices, which could accelerate the ruble's weakening and trigger a spike to 80 rubles per dollar as early as August.
Editorial forecast
Asset: USD/RUB pair. Direction: short-term sideways with a risk of slipping 0.3-0.5% lower in the next 48 hours, but with a strong signal for a reversal to weakening within 2-4 weeks.
Key levels: lower boundary — 69.9 (May 20 low), upper boundary — 71.3 (Moscow Exchange closing level). Confidence level: medium regarding the short-term sideways movement.
The tax period will continue to support the ruble until the end of the week, but the market is already beginning to price in expectations of increased currency purchases by the Ministry of Finance in June. The main risk is an unexpected statement by Trump about a breakthrough in negotiations with Iran, which would crash oil by 5-7% and simultaneously weaken the ruble by 1.5-2% within a single session. This is an editorial opinion, not an investment recommendation.
— Editorial Team
