The Russian ruble was bolstered to US dollars at 82.3 on Wednesday, making it the world’s best performing currency, and even the traditional safe haven of gold.
Data compiled by Bloomberg shows that since the beginning of this year, the ruble has bolstered 38% against the dollar in the commercial market show.
According to the Russian Central Bank, the actual effective ruble exchange rate in March (adjusted to inflation, the currency of Russia’s major trading partners) rose 7.1% compared to the previous month. Under the annual conditions, the exchange rates from January to March increased by 19.2%.
The central bank has implemented strict monetary policies, raising key interest rates to 21% in response to rising inflation resulting from rising military spending that boosted the value of the currency. These high interest rates attract foreign investors for higher returns, which in turn increases demand for the ruble.
At the same time, despite the extreme sanctions regime, an aggressive trade surplus increased profits.
Russia recorded a trade surplus of $18.5 billion in the first two months of 2025, showing a 15% increase compared to the same period last year. This was mainly due to a 5% drop in imports and a 25% increase in foreign currency sales by Russian exporters, who were more aggressively converting revenues to Rubles, the independent Meduza News website reported.
With Donald Trump returning to US President, the rapidly warming relationship between Washington and Moscow has improved emotions, and a ceasefire in the Ukrainian war is considered more likely than ever.
Some international investors have said “Russian assets”A friendly country“In anticipation of their value rally, where demand for Russian currency is also increasing.
Conversely, Trump’s “Release date“Taxes still have investors volatile and undermining confidence in the dollar, which pushes Ruble’s value up in relative terms, raising concerns about its stability and the potential “trust crisis” already struck by US bonds and stock markets.
Finally, seasonal patterns also play a role, with import activities slowing down demand for foreign currency in the early years. At the same time, strong export performance has led to an increase in the supply of foreign currency, contributing to the Louvre’s appreciation.
The powerful ruble is not good news for the Kremlin. Because Russia’s exports are competitive and the number of rubles available due to rising spending is reduced.
Russia’s oil revenues are controlled by the dollar, but expenditures are derived from the ruble. In other words, a strong ruble reduces the number of rubles available to meet budgetary expenditures.
The 2025 budget forecasts a federal budget deficit of 0.5% of GDP, but the Treasury recently said that this target could be overlooked this year.
First this article It appeared On Bne Intellinews.
