Why the Russian ruble is the best currency in the world this year

In the midst of a long war drawn, low oil prices, harsh sanctions, the economy in the slope, Russia Ruble He was rising.

In fact, it’s the best currency in the world so far this year, according to Bank of America, with gains more than 40 %. The amazing Ruble gathering in 2025 is a sharp reflection since the past two years when the currency has decreased dramatically.

What works to operate the Russian currency?

Market observers told CNBC that the force in the ruble has nothing to do with the sudden jump in the confidence of foreign investors from the controls of capital and the tightening of politics. Weakness in the dollar comes as an additional reward.

Brendan McCina, international economist and foreign currency strategy in Wales Fargo, lists three reasons for the Ruba gathering. “The central bank chose to keep the relatively high rates, and the controls have been tightened on capital and other restrictions on FX a little, and (there was) some progress or attempt to progress in finding peace between Russia and Ukraine.”

The Russian central bank has Keep a restricted position to reduce high inflationKeep the household Use interest rates are 20 % high and credit tightening. Acute borrowing costs Determine From importing goods, in turn reduces the demand for foreign currency between Russian companies and consumers, industry monitors said.

André Milacchanko, an economist in the capital, said there is a decrease in the demand for foreign currencies from local importers, given the weak consumption and adequate width of the ruble. This decrease gave rubles a batch as banks do not need to sell rubles to buy the dollar or yuan.

The Russian exporters should push in rubles, or at least convert the payment of the dollar to rubles, thus increasing the demand. On the other hand, the importers stopped buying foreign goods, and therefore they do not need to sell rubles to pay in dollars.

In the first quarter of 2025, there was “exaggerated” in consumer electronics, cars and trucks that were actively imported in the second half of last year in anticipation of increasing import duties. The slowdown in consumer activity in the strong commodity sector was primarily It is a large part of Russia’s importsMilacchanko said.

Analysts said the other main reason that the Russian ruble this year is that the Russian exporters, especially the oil industry, have converted foreign profits into rubles. The Russian government requires senior exporters to return part of their foreign profits to the country and exchange them for the ruble in the local market, according to the government.

Between January and April, Foreign currency sales By the largest exporters in Russia a total of $ 42.5 billion, showed data from CBR. This is approximately 6 % jump compared to four months before January.

Steve Hank, professor of applied economics at Johns Hopkins University, said CBR also supports rubles.

In August 2023, the growth rate of the money created by CBR increased by 23.9 % annually. Hank said this number has become negative since January -and is currently contracting at a rate of -1.19 % annually.

Moreover, the hopes of the peace agreement between Ukraine and Russia after the election of US President Donald Trump raised some optimism, as McKena from Wales Vargo said. The expectations of reintegration of Russia to the economy prompted some capital flows to the ruble -resistant assets, despite the capital controls, which supported the currency strength to some extent.

Government financial affairs Very sensitive to fluctuations in crude pricesAs oil and gas profits constitute about 30 % of federal revenues in 2024, according to Healy Simula, the major economists at the Bank of Finland.

“The Ministry of Finance was forced to rely heavily on the National Fund for Social Welfare to cover spending,” said Milacchanko. “There may be other discounts in non -priority expenses if this trend continues.”

However, regardless of the oil trade, Russia was mostly isolated from the global market. “In the sense that rubbing the weakest does not add much to Russia’s commercial competitiveness,” McKena said.