The strengthening of the ruble may work against the Kremlin. How so?

On April 18, Friday, the exchange rate of the Russian ruble against the dollar and yuan reached its highest level since June 2023. This was reported by DW, citing data from the Moscow Exchange website.

Due to US sanctions, trading in dollars and euros on this platform has been suspended since June 2024. However, the Moscow Exchange continues to announce indicative currency rates. According to this data, on April 18, the exchange rate for one US dollar was 82.02 rubles.

The ruble sharply strengthened in 2025

At the end of November 2024, the Russian currency had depreciated to nearly 110 rubles per dollar. At the beginning of 2025, one dollar was equivalent to 101.6 rubles, and amid the Biden administration's sanctions on Russian oil, the rate reached its highest point of the year on January 15 at 103.4 rubles. However, after Donald Trump returned to the White House, the ruble began to stabilize. During this time, the ruble strengthened by 30 percent against the dollar.

At the beginning of the year, the yuan exchange rate was 13.94 rubles, but by April 18, this figure had decreased to 11.16 rubles, or by 20 percent. At the beginning of the year, the euro exchange rate was 106.25 rubles, but by April 18, it had fallen to 93.25 rubles, or by 12.25 percent.

The current exchange rate of the dollar against the ruble is the lowest since June 2023, and against the yuan, it is the lowest since May 2023. The euro also significantly depreciated against the ruble in February and March 2025.

Bloomberg: The ruble has become more profitable than gold

According to Bloomberg's report on April 15, the ruble has strengthened by 38 percent against the dollar since the beginning of 2025 in the over-the-counter market, making it the fastest-growing currency in the world. During this period, the price of gold increased by 23 percent.

According to Bloomberg, the strengthening of the ruble is supported by the Central Bank of Russia maintaining the key rate at 21 percent, which has also had a positive effect on inflation. Additionally, unlike other emerging market currencies, the ruble is not experiencing capital outflows due to global investors abandoning risky assets, as most of them have already left Russia.

The agency notes that the strengthening of the currency could be an unpleasant event for the Kremlin, as it reduces energy revenues received in foreign currency and increases production costs within the country. The volume of rubles allocated for the war in Ukraine and social programs is also increasing.

What factors are influencing the stabilization of the ruble exchange rate?

Geopolitical optimism. The start of negotiations between Russia and the US, as well as contacts between Americans and Ukrainian officials to resolve the conflict, are encouraging foreign investors to inject capital into the Russian stock market. There have also been reports that the US is preparing plans to ease sanctions against Russia.

In its latest report, the Central Bank of Russia cited the positive expectations regarding the decrease in geopolitical tensions as one of the main factors influencing the strengthening of the ruble.

Increase in currency revenues. In February, the net trade of 29 of Russia's largest exporters increased by 25 percent compared to January, amounting to 12.4 billion dollars. As a result, demand for ruble assets in the financial market increased.

Decrease in seasonal demand. Analysts from the Market Power project note that in the first quarter, demand for currency will be low among both importers and the population. During this period, the need for foreign currency to pay off external debt will also decrease compared to other times of the year.

Weakening of the dollar on the global market. In March, the American currency weakened not only against the ruble but also against other currencies. Globally, demand for the dollar has decreased due to growing concerns about the prospects of the US economy. The market turmoil was primarily caused by Donald Trump's trade war. The high tariffs imposed by the American president could lead to a recession in the economy.