Why has the Russian ruble performed so well this year?

Justin Klawans

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While Russia's economy has faced significant turmoil due to heavy war-related sanctions, the country's currency has not suffered. The Russian ruble has grown significantly and is up 45% against the U.S. dollar in 2025. And interest rates on ruble deposits have similarly seen widespread growth, helping to attract investment savers. But according to financial analysts, the spike in the ruble's value may end up doing more harm than good to Russia's economy.

What did the commentators say?

The ruble has become the "best-performing global currency, posting this year's strongest gains against the dollar," said Bloomberg. It has even outperformed generally safe commodities like gold and silver, as well as typically strong European currencies like the Swedish krona and Swiss franc.The spike in the ruble, as shown by data from the Bank of Russia, has been "driven primarily by the central bank's tight monetary policy and optimism" that the war in Ukraine could end, said Reuters. 

The Russian bank's handling of China's currency, the yuan, has also played a role, as Russia has been "selling the Chinese yuan, its only major intervention tool, to support the ruble." As a result, when the ruble "strengthens against the yuan, its rate against the dollar strengthens as well to avoid arbitrage." This has made China's currency more valuable in Russia than the U.S. dollar, and in "2024, 95% of Russia's trade with China was settled in yuan and rubles."

The "strength of the ruble has less to do with a sudden jump in foreign investors' confidence than with capital controls and policy tightening," said CNBC. Russia's central bank has "maintained a restrictive stance to curtail high inflation," and there has also been a "decline in foreign currency demand from local importers" due to the shrinking U.S. dollar, Andrei Melaschenko, an economist at Renaissance Capital, said to CNBC. The decline in the dollar has "given the ruble a boost as banks don't need to sell rubles to buy the dollar or yuan."

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