Ruble acts as this year’s best-performer
(MENAFN) The Russian ruble has become the best-performing currency of the year, surpassing even traditional safe-haven assets like gold, according to Bloomberg on Tuesday. Based on over-the-counter market data, the ruble has appreciated by 38% against the U.S. dollar, outpacing gold’s 23% rise since January.
Experts attribute the ruble’s remarkable rise to a mix of geopolitical developments and monetary strategies implemented by the Bank of Russia. Unlike many emerging-market currencies, the ruble has remained stable due to capital controls, which have insulated it from investor flight during global market turbulence, according to Sofya Donets, an economist at T-Investments.
The Bank of Russia’s decision to raise interest rates to a record-high 21% in October to combat inflation has also played a major role. This policy has reduced import demand and thus limited the need for foreign currency. Additionally, regulations requiring exporters to convert part of their foreign earnings into rubles—introduced in response to Western sanctions—have further strengthened the domestic currency.
Improved diplomatic ties between Washington and Moscow, particularly in efforts to de-escalate the Ukraine conflict, have also helped restore investor confidence in Russian assets. Iskander Lutsko, head of research at Istar Capital, noted that global investors are showing renewed interest in ruble-denominated assets, especially in countries maintaining strong economic links with Russia. He added that current conditions are likely to sustain the ruble’s strength in the near term.
“There are no strong indicators pointing to a ruble decline anytime soon, especially with no rate cuts expected next quarter,” Lutsko said.
The ruble’s surge has coincided with a decline in the U.S. dollar, which recently hit a six-month low after President Donald Trump introduced sweeping “reciprocal” tariffs on nearly 90 countries. Although the U.S. later suspended most of these tariffs for 90 days—excluding China—the move rattled global markets. Analysts say the tariffs have undermined confidence in the U.S. dollar and Treasury securities as stable investment options.
In contrast, the ruble has remained largely unaffected by the trade war, as Russia has not been included in the new U.S. tariff measures.
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