The yuan on the Moscow Exchange climbed to 11.69 rubles —
its highest level since Sept. 25. The dollar on the over-the-counter market
rose to 80.66 rubles — the highest since Jan. 6 — while the euro reached 92.47
rubles, its highest level since Jan. 12.
Since the beginning of March, the ruble has lost nearly 5%
against the yuan and about 4% against the dollar, posting its fourth
consecutive weekly loss for the first time since last summer. Analysts at PSB
say the key reason is the halt in foreign currency sales from Russia’s National
Wealth Fund that had been used to cover the federal budget deficit.
At the beginning of March, Russia’s Finance Ministry
announced it would suspend those sales, which in recent months had reached
record levels of about $2 billion per month.
According to estimates by VTB, the move could weaken the
ruble by roughly 10% against the yuan while helping authorities preserve the
remaining reserves of the National Wealth Fund. The fund’s liquid assets have
fallen 2.5 times since the start of the war, while its foreign currency
holdings have dropped to their lowest level since the fund was created in 2008.
The underlying problem is structural: a strong ruble is
incompatible with Russia’s chronic budget deficit, said Andrey Khokhrin, CEO of
Ivloga Capital.
During January and February alone, the federal budget
deficit reached 3.5 trillion rubles, with government revenues nearly half the
level of spending.
Foreign currency inflows into the economy are also shrinking
as Russian oil prices declined earlier in the year, while some banks are
experiencing shortages of yuan, economist Yegor Susin wrote.
Evidence of that shortage is visible in rising interest
rates on yuan-denominated loans in the interbank market. For most of last year,
banks were willing to lend Chinese currency to each other at about 1% annually.
Now those rates range from 7% to 11%.
“An influx of foreign currency by the end of spring, driven
by higher oil prices, could improve the situation,” Susin said.
Russia’s oil and gas revenues in 2025 fell to their lowest
level since the coronavirus pandemic.
Officials in the Russian government acknowledge that the
federal budget could face a significant deficit as early as the beginning of
2026 due to lower-than-expected oil and gas revenues.
Ukrainian intelligence says the financial condition of
Russia’s medium- and large-sized businesses continues to deteriorate,
reflecting growing imbalances in the corporate sector.
More than half of Russia’s large companies finished 2025
with declining profits, cut or froze investment projects, and many are
preparing layoffs.
On Feb. 24, 2026, reports emerged that Russia is preparing
to shut down about 300 companies.
For the first time in history, 74 Russian regions
simultaneously fell into budget deficits.
Russia has also begun experiencing a wave of mass business
closures.
Russia’s Finance Ministry has acknowledged that the federal
budget shortfall is growing at record speed.
Russia’s state statistics agency Rosstat reported that more
than 17,000 Russian businesses declared losses.