“The ruble’s rise creates a new threat to the Russian economy – mediaThe Russian ruble has strengthened by 45% since the beginning of the year, trading at around 78 rubles per dollar, which is the
strongest growth since 1994. This poses a threat to the country’s war economy, despite falling oil prices and new sanctions.
”, — write: unn.ua
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This year, the Russian ruble has outperformed all major currencies against the dollar, which came as a surprise to policymakers and threatens to undermine the country’s war economy.
Since the beginning of the year, the ruble has strengthened by 45% and is trading at around 78 rubles per dollar, almost equal to the level observed before Russia’s full-scale invasion of Ukraine almost four years ago. Over the past 12 months, the exchange rate growth has been the strongest since at least 1994, according to data.
A key factor was a sharp drop in demand for foreign currency in Russia amid international sanctions, and an extremely tight monetary policy increased the attractiveness of ruble assets for residents. The central bank’s key rate remained at a record high from October last year to June, after which policymakers lowered it by 5 percentage points to 16%.
The government predicted an average exchange rate of 91.2 rubles per dollar for this year. The stability persists despite falling oil prices and new sanctions from the US and Europe, which increase pressure on state finances, reducing exporters’ revenues when converted into rubles.
Support for the currency was also provided by foreign currency sales by the Bank of Russia, reflecting the operations of the Ministry of Finance, which manages yuan and gold from the National Welfare Fund to compensate for lost energy revenues.
According to the Ministry of Finance, budget revenues from oil and gas fell by 22% in the first 11 months of the year.
According to data compiled by Bloomberg, the ruble’s growth this year puts it among the top five most profitable global assets in terms of spot profitability after platinum, silver, palladium, and gold.
For the central bank, a stronger ruble is desirable in the fight against inflation, and Governor Elvira Nabiullina has made it clear that the disinflationary effect has not yet run its course. But economists at Moscow’s Stolypin Institute for Growth Economics warn that the strengthening ruble is increasingly becoming a threat.
RecallIn 2025, the trend towards nationalization in Russia intensified sharply: the authorities are actively seizing private companies, usually with subsequent resale to investors loyal to the Kremlin.