The strengthening of the Russian ruble is not mainly due to increased trust in the currency but rather the result of the Central Bank’s strategic economic moves and implementing capital restrictions during the ongoing conflict.
The Russian Ruble Is 2025’s Best-Performing Currency. But Why?
This year, the Russian ruble has had an exceptional performance, making it the top-performing currency so far. Starting from January, when one U.S. dollar was approximately equal to 110 rubles, the ruble has been gaining strength against the U.S. dollar. Now, the exchange rate stands at around 80 rubles per dollar, indicating a significant recovery over a short span of time. (Bank of America’s findings)
Nevertheless, the motive for this action doesn’t stem from restored faith in Russia’s future, but rather from a set of actions taken by the Russian Central Bank aimed at preserving equilibrium amidst international sanctions imposed on Russia.
Brendan McKenna, international economist and foreign exchange strategist at Wells Fargo, stated that there are three reasons for this development. Talking to CNBC, he stated:
The central bank has chosen to maintain higher interest rates, and there’s a slight strengthening of financial regulations and foreign exchange limitations, along with efforts or attempts towards achieving peace between Russia and Ukraine.
Despite the ongoing rally, analysts predict it could weaken over the next few months due to Russia’s anticipated reduction in income as oil prices decline. Andrei Melaschenko, an economist from Renaissance Capital, pointed out that this situation might influence the exchange rate. He emphasized that the substantial drop in oil prices would likely result in a decrease in export revenue and the sale of foreign currency.
If a peace accord is signed, existing restrictions will be removed, which could significantly impact the Ruble’s exchange rate moving forward. As McKenna pointed out, this could potentially lead to a quick devaluation of the Ruble, especially if there’s a peace agreement or ceasefire.
Conversely, Russian analysts claim that the ruble is still undervalued and can regain even more ground in the long term.
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2025-06-10 14:01