Fluctuation

The word comes from the Latin fluctuatio: “wavering”. In economics, it refers to random deviations of an indicator from its average value or trend. A currency’s exchange rate may rise over a month but jump in both directions within that month. These jumps are fluctuations.

How it differs from volatility

A fluctuation is the swing itself, a specific movement of the rate. Volatility is a measure of how strongly and how often the rate swings over a period. High volatility means large fluctuations.

Where they come from

The rate responds to central bank decisions, news, demand from importers and exporters, and trading volume. In currencies with a small market, even one large deal moves the rate. During the day, the market rate can differ noticeably from the official Bank of Russia rate, which is set once a day.

Where it comes up in payments

The invoice is issued in foreign currency, and you pay in roubles. Between the contract date, the invoice date and the payment day, the rate has time to move. For an importer, this is real money: the same amount in foreign currency costs a different number of roubles. For an exporter, the same applies to proceeds.

Besides market movement, the result is affected by the FX markup that the bank or agent charges on conversion. It is important to tell it apart from fluctuations: you do not control market swings, but you can compare markups.

What to watch for

Calculate the full cost of the payment in roubles at the moment of decision, not at the Bank of Russia rate. For large contracts, consider hedging or a payment schedule.

In a deal through a broker, the exchange rate is fixed in the payment order for each payment before the roubles are debited, and swings after the payment order is signed do not affect the amount. You can compare your current rate on the Compare your rate page.