In a recent report by Gleb Bryanski from Moscow (Reuters), market participants are starting to consider the potential impact on the Russian ruble following Donald Trump’s commitment to swiftly end the conflict between Ukraine and Russia. The ruble has faced challenges and sanctions in the past, but has shown resilience in recent months.
The ruble began the year at its lowest level since March 2022 but has since strengthened by approximately 10%, emerging as the top-performing currency among emerging markets in 2025. Despite facing U.S. energy sanctions in January, the ruble is on track for its strongest month since implementing emergency measures post the invasion of Ukraine in February 2022.
The currency started to strengthen in mid-April 2024 as military developments favored Russia, despite a drop in oil prices, a crucial export for the country. However, a reversal occurred with Ukraine’s advances into Russia’s Kursk region, leading to accelerated ruble losses following U.S. sanctions on Gazprombank in November.
Analysts speculate that potential talks between Trump and Putin could lead to a partial lifting of Western sanctions on Moscow, driving a ruble rally through increased exports and foreign investments. Nonetheless, the full lifting of sanctions is unlikely until a long-term resolution to the conflict is achieved.
The ruble’s value has been influenced by geopolitical events rather than economic factors, making it challenging to determine its fair value. The central bank reported that the real effective exchange rate was 9% below its 10-year median, indicating a potential undervaluation.
Since the outbreak of the conflict, the ruble’s behavior has been volatile, with sharp fluctuations in response to geopolitical tensions and sanctions. Despite the challenges, the ruble has displayed resilience and adaptability in the face of adverse market conditions.
In June 2024, the spotlight shone brightly on China’s yuan as it claimed the top spot as the most traded currency on MOEX, swiftly becoming the currency of choice for central bank interventions. The central bank meticulously set official exchange rates by leveraging interbank trade data provided by lenders, a decision applauded by FX traders who viewed the rates as a reliable benchmark for the over-the-counter market. Complemented by the active trading of rouble/dollar futures on MOEX, this duo formed a formidable combination that painted a vivid picture of the currency landscape.
Officials declared their commitment to a floating exchange rate policy, affirming stability and adaptability in the foreign exchange market. Amidst this backdrop, banks and companies operating in Russia’s FX market found themselves navigating a complex terrain filled with both challenges and opportunities. Approximately half of Russia’s 316 banks remained unscathed by sanctions, granting them the freedom to engage in the trading of dollars and euros, a lifeline for many in the financial realm.
Western banking giants such as Italy’s UniCredit, Hungary’s OTP, and Austria’s Raiffeisen Bank International were not mere spectators in this dynamic arena. Their subsidiaries operating in Russia brought a global perspective to the local market, infusing a sense of diversity and expertise. The demand for dollars and euros emanated primarily from importing companies, reflecting the enduring ties between Russia and Europe despite a gradual shift in the composition of foreign trade.
As the intricate web of currency transactions continued to unfold, the resilience and adaptability of Russia’s FX market were put to the test. The interplay of economic forces and geopolitical dynamics painted a nuanced picture of an ecosystem in constant flux, where agility and foresight were paramount for survival.
In the midst of these developments, the narrative of Russia’s FX market emerged as a captivating tale of resilience and innovation. The echoes of past challenges mingled with the promise of future opportunities, creating a tapestry of experiences that captured the essence of a rapidly evolving landscape.
Reporting by Gleb Bryanski, with additional contributions from Alexander Marrow and Elena Fabrichnaya; edited by Karin Strohecker and Alison Williams, this reimagined account of the unfolding events in Russia’s FX market serves as a testament to the enduring spirit of adaptation and growth in the face of adversity.
