The Russian ruble strengthened to 82.3 against the U.S. dollar on Wednesday, marking a major milestone as it became the world’s best-performing currency so far this year, surpassing even gold.
Since the start of 2025, the ruble has gained 38% in value against the dollar, according to Bloomberg data. This impressive rise reflects the ruble’s performance on the over-the-counter market.
The Russian Central Bank reported that the real effective ruble exchange rate, which measures its value against the currencies of Russia’s main trading partners and adjusts for inflation, rose 7.1% in March compared to February. Over the first quarter of the year, the rate increased by 19.2%.
A key factor behind the ruble’s strength is the Central Bank’s tough monetary policy. In response to rising inflation, driven in part by increased military spending, the bank raised interest rates to 21%. These high interest rates have attracted foreign investors looking for better returns, boosting demand for the ruble.
Additionally, Russia’s positive trade balance has supported the ruble. Despite heavy international sanctions, the country posted a trade surplus of $18.5 billion in the first two months of 2025, up 15% from last year. A 5% drop in imports and a 25% rise in foreign currency sales by Russian exporters have contributed to this surplus, Meduza news website reported.
The ruble’s gains have also been helped by improved sentiment, particularly following former U.S. President Donald Trump’s return to office and warming relations between the U.S. and Russia. Some see a ceasefire in the Ukraine conflict as more likely, which has sparked investor interest in Russian assets.
However, Trump’s tariffs on U.S. goods, dubbed “Liberation Day” tariffs, have raised concerns about the dollar’s stability. These developments have, in turn, boosted the ruble’s value further and raised fears of a potential “confidence crisis” in the U.S. financial markets.
Seasonal patterns have also contributed to the ruble’s rise. Reduced import activity early in the year has lowered demand for foreign currencies, while strong export performance has increased the supply of foreign currency.
Despite the ruble’s success, the Kremlin faces challenges. A stronger ruble makes Russian exports less competitive and reduces the rubles available for government spending. Since oil revenues are paid in dollars, a stronger ruble means the government needs more rubles to meet its spending obligations.
The Russian Finance Ministry has warned that it may not meet the 2025 budget’s forecasted 0.5% federal deficit, as the ruble’s strength may complicate the country’s fiscal planning.
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