Why the Ruble is Strengthening While Searches for "Dollar Devaluation" Reach Record Highs: Macroeconomic Reasons, Influence of the Bank of Russia's Policy, and What This Means for Investors in 2025.
An Unexpectedly Strong Ruble at Year-End
By the end of 2025, the Russian ruble is demonstrating an unexpected strength. Exchange rates for major foreign currencies have noticeably fallen: the US dollar has dropped to approximately 75–77 rubles, and the euro to 90 rubles, marking the lowest values in the last two and a half years. This rapid appreciation of the ruble has captured public attention: according to Google, the number of search queries about " dollar devaluation" has soared to historical highs for the quarter. Typically, by December, the ruble weakens (due to increased imports for the holidays and budget expenditures), but the current situation breaks stereotypes. Investors and ordinary citizens are concerned—trying to understand what underlies the strengthening of the national currency and whether it is time to rush to currency exchange offices for dollars.
Trade Surplus and Import Restrictions
One fundamental reason for the strengthening of the ruble is the substantial positive trade balance of Russia. Exports significantly exceed imports, ensuring a stable influx of foreign currency into the country:
- High Export Revenues. Thanks to the export of energy resources and other goods, Russia continues to receive a large volume of revenue in foreign currency. Even considering sanctions and falling oil prices, export volumes remain significant. Furthermore, non-oil and gas exports have recently shown growth, increasing currency inflow.
- Decline in Imports. Imports into Russia remain relatively low. Sanctions and government measures—such as increased recycling fees and other restrictions—curtail the inflow of foreign goods (cars, equipment, etc.). The import substitution strategy creates additional barriers for foreign products. Additionally, domestic demand has weakened: economic growth has slowed, real incomes are rising modestly, and an increase in VAT is on the horizon—all of which limit purchasing power and the need for imported goods. As a result, demand from importers for foreign currency remains low.
- Dedollarization of Payments. The share of payments in national currencies has increased. Russia and its trading partners are increasingly switching to rubles, yuan, and other "alternative" currencies in foreign trade. Many transactions for exported goods are now conducted without the involvement of dollars or euros. This reduces direct demand for reserve currencies in the domestic market. Simultaneously, the country's dependence on fluctuations in oil prices has decreased due to the budget rule mechanism.
- Cryptocurrency as "Covert Export." A new factor has emerged: part of international payments is now conducted through cryptocurrencies. Officials estimate that significant sums for import supplies may be paid in cryptocurrency. This effectively means that Russian exporters, for example, of energy resources, receive not goods or dollars in return, but digital assets that can then be converted. This covert export generates additional currency revenue and reduces the need for official dollars to pay for imports. All this supports the strengthening of the ruble.
Monetary Policy and Financial Factors
Another group of reasons is related to the financial system and the regulators' policies. Tight monetary conditions within the country significantly support the ruble:
- High Interest Rates of the Bank of Russia. The key interest rate of the Bank of Russia is at a double-digit level (around 17% per annum). Such high rates have made ruble instruments extremely attractive to investors and depositors. Banks offer 15–20% per annum on deposits, reliable bonds provide high coupons—all this stimulates the storage of savings in rubles rather than in foreign currencies. Both the population and businesses are less inclined to buy dollars or euros, which do not yield income when significant profits can be obtained in rubles.
- Influx of Rubles from Exporters. Exporters, receiving revenue in foreign currency, sell a significant part of it on the domestic market. This is partly a legislative requirement and partly a rational decision: to convert dollars to rubles in order to place them at high interest or finance domestic expenses. Under high rates, even exporters themselves are keen to quickly exchange currency for rubles and earn interest, instead of holding funds in "devaluing" dollars.
- Reduced Capital Outflow. The Russian financial market has become more "closed." After 2022, the country's external debt and that of corporations significantly decreased, as access to external capital markets has been closed off. Foreign investors have largely left the Russian market. As a result, the need for foreign currency for paying external debts or transferring funds abroad has noticeably diminished. Strict capital movement restrictions (which have been recently relaxed for individuals) also play a role: rubles primarily remain within the country. The exchange rate is now primarily shaped by the balance of exporters and importers, without previous pressure from financial speculators or panic among the populace.
- Currency Interventions According to the Budget Rule. An additional factor has been the policy of the Ministry of Finance and the Central Bank in the currency market. In recent months, the government has actively been selling foreign currency from the National Welfare Fund through "mirror" operations as per the budget rule. Since December 5, the volume of currency sales has sharply increased—according to the Ministry of Finance, to an equivalent of about 14.5 billion rubles a day, which is approximately 1.5 times higher than in the fall. Essentially, the regulator is daily injecting a significant amount of dollars and euros into the market, buying rubles in exchange. This creates an oversupply of currency and prevents the dollar from rising, thus supporting the strength of the ruble.
- Weakness of the Dollar in the Global Market. The strengthening of the ruble is not occurring in a vacuum—it is also supported by external factors. The US dollar globally weakened at the end of 2025: investors anticipate a near-term reduction in the Federal Reserve's rate and a softening of monetary policy. The DXY index (the dollar's exchange rate against major world currencies) has fallen to its lowest levels in recent years. The dollar is depreciating against many currencies, and the ruble is no exception. In addition, the anticipated transition to power in the USA by an administration oriented towards a weaker dollar (as analysts believe this line could be pursued by the new financial authorities) weighs on the American currency. Thus, external factors are also working in favor of the ruble.
- Geopolitical Expectations. Finally, market sentiment is influenced by geopolitics. At the end of the year, cautious hopes emerged for a de-escalation of international tensions—partly thanks to diplomatic signals. Although there are still no concrete peace agreements, some market participants have factored in expectations for a more favorable scenario in the future. This has reduced the frantic demand for currency among the population and businesses as a "safety net." Any positive news (such as the expansion of cooperation with major partners like India or hints at possible negotiations to resolve conflicts) supports the ruble. However, experts emphasize: the geopolitical factor is rather psychological—it may have accelerated the current strengthening but cannot holding the ruble up for long without support from other fundamental reasons.
The Pros and Cons of a Strong Ruble for the Economy
Such a sharp appreciation of the national currency has a dual effect on the economy—there are both winners and losers due to the strong ruble.
- Advantages for Citizens and Importers: The strengthening ruble curbs inflation. Prices for imported goods (electronics, cars, clothes, fruits, etc.) either cease to rise or decrease in ruble terms. This supports the real purchasing power of the population and reduces costs for companies importing raw materials and components. Trips abroad and payment for services in foreign currencies (tourism, education, overseas services) become cheaper for Russians. A strong ruble generally enhances confidence in the national currency and financial stability—savings in rubles depreciate more slowly, positively affecting domestic consumption.
- Disadvantages for the Budget and Exporters: The Russian economy is historically export-oriented; therefore, an excessively strong ruble hits exporters hard. Companies selling their goods abroad for dollars or euros (oil and gas, metallurgy, chemistry, etc.) receive fewer rubles upon conversion of revenue. Their profitability declines, which may lead to reduced investment, development costs, and even decreased production volumes. The state budget receives fewer ruble revenues from export duties and taxes: oil and gas revenues in rubles have significantly decreased as the ruble has strengthened, intensifying budget deficits. Ultimately, an excessively strong ruble poses a challenge to economic growth: export-oriented sectors, which are drivers of the economy, lose profitability. If this situation persists, it may have negative consequences for employment in these sectors and for revenue to the treasury. The government effectively has to balance the goals of curbing inflation (where a strong ruble helps) and supporting export-oriented sectors (which need a weaker ruble to operate comfortably).
Government Responses to the Strengthening Ruble
The unusual exchange rate dynamics have not gone unnoticed by the country's leadership. Russian authorities openly acknowledge that an overly strong ruble creates problems. Head of the Ministry of Economic Development Maxim Reshetnikov described the current strengthening of the ruble—almost a quarter since the beginning of the year—as one of the main challenges for the economy and stated that "the strong ruble is a new reality that must be taken into account." A discussion has unfolded in business circles and the government about whether a currency corridor or other measures are needed to weaken the ruble, but the Ministry of Finance has opposed direct currency management. Finance Minister Anton Siluanov stated that the floating exchange rate under current conditions reflects the balance of supply and demand and is approximately consistent with the parameters of the balance of payments. In other words, the authorities do not plan to artificially return to a fixed exchange rate—the economy is suggested to adapt to the strong ruble.
Nevertheless, indirect measures to regulate the situation are being implemented. As already noted, since December, the Ministry of Finance has increased currency sales from reserves, attempting to smooth out currency fluctuations and partially compensate for the seasonal rise in demand for currency at year-end. Simultaneously, the Central Bank has started to gradually ease previously imposed currency restrictions. Since December 8, the regulator has lifted the remaining limits on transferring currency abroad for Russian citizens and "friendly" non-residents. Previously, individuals could send a maximum of $1 million abroad per month—this restriction has now been removed. The Central Bank explained the decision by the stability in the currency market. Some experts believe that abolishing limits is a move towards a more market-oriented formation of the exchange rate: it increases the flexibility of payments, reduces the incentive to engage in grey capital outflow schemes, and, most importantly, allows the "steam" to be released from the overheated currency market, slightly increasing capital outflow.
Furthermore, the stimulation of imports is being discussed. M. Oreshkin, the economic aide to the president, noted that for a return to a weaker ruble, the government may need to pursue aggressive policies to increase imports in certain segments—consciously raising demand for currency. However, current official statements reflect confidence that the situation is being controlled. Regulators imply they have sufficient tools at their disposal to prevent excessive strengthening or severe volatility of the ruble. Overall, the policy revolves around smoothing out extreme fluctuations in the exchange rate while not hindering market trends: the strong ruble is leveraged as an ally in the battle against inflation, but at the same time, the authorities strive to prevent a scenario where the exchange rate becomes "too good to be true" and harms the budget.
Prospects: How Long Will the Ruble Remain Strong?
The main question for investors and businesses is whether the current exchange rate around 75–80 rubles per dollar will be sustained over an extended period. The majority of analysts believe: in the short term, through the end of the year, the ruble will remain relatively strong in the absence of external shocks. This is supported by all the factors listed—ranging from export revenues to the Central Bank's policies. Many investment companies have adjusted their forecasts and now expect the year to end with an exchange rate in the range of 75–78 ₽ per $ and 90 ± 5 ₽ per €. The ruble may weaken slightly before the New Year holidays due to a seasonal increase in consumer and corporate spending (including on imported goods) and capital outflow, but significant deviations are not anticipated. The regulator will continue to sell currency, smoothing out increased demand, so sharp fluctuations in the exchange rate are unlikely.
In 2026, experts expect a gradual weakening of the ruble. Keeping the national currency this strong consistently is difficult and economically unbeneficial. The base scenario of major banks and analytical centers suggests a return of the dollar to the level of 85–95 rubles within the year. Some forecasts for the end of 2026 mention a range of approximately 90–100 rubles per dollar. The reasons include the change in the very factors currently supporting the ruble. Firstly, a softening of monetary policy is expected: if inflation in Russia continues to decelerate, the Bank of Russia may begin to gradually lower the key rate. There are forecasts that the rate will drop from its current heights (17%) to 14–15% by the first half of 2026. The cheaper ruble loans and lower interest rates on deposits will diminish the attractiveness of the ruble for speculative operations and again increase the willingness of businesses and the population to purchase foreign currencies.
Secondly, the scale of currency interventions will decrease. The Ministry of Finance does not plan to sell foreign currency indefinitely: sales volumes under the budget rule in the new year are likely to be reduced, especially if oil prices recover slightly. This will remove some of the support that the ruble currently receives from the government. Thirdly, there may be an increase in imports. The economy cannot satisfy all demand solely based on domestic production for an extended period—sooner or later, companies will start importing more equipment, components, and goods from abroad, particularly as they adapt to sanctions. Additionally, the VAT increase starting January 1, 2026, may encourage businesses to purchase imported goods in advance, thereby increasing demand for currency. The population traditionally spends more during the winter holiday period, including for trips abroad, which temporarily increases demand for dollars and euros.
Finally, geopolitical factors should not be discounted. If de-escalation occurs—for instance, through a hypothetical peace agreement and subsequent partial lifting of sanctions—the ruble may receive another boost for strengthening. Some optimistic forecasts suggest that under favorable circumstances, the rate could briefly fall to 70–75 ₽ per $ in the first quarter of 2026. However, even the authors of such scenarios caution that this would be a one-time, emotional strengthening: in the long term, fundamental economic factors will assert themselves, and an excessively strong ruble will inevitably recede. Conversely, if the geopolitical situation remains tense or worsens—new sanctions, risks for exports—that will accelerate the ruble's weakening.
Overall, the consensus is this: the current ultra-strong ruble is a phenomenon supported by a combination of unique factors, and it is unlikely to persist unchanged throughout the next year. Most likely, the ruble's exchange rate will gradually shift to a more "comfortable" range for the economy. Experts do not anticipate a sharp collapse of the national currency—unless an unforeseen emergency occurs, the ruble's weakening will be gradual. In other words, the dollar at 100 rubles may return, but not as a sudden spike tomorrow, rather as a result of a gradual process over the course of 2026. Simultaneously, a return to extremely low values (50–60 ₽ per $, as seen a few years ago) also does not seem likely—too much has changed in the economy. We can expect relative stability of the ruble in winter and a moderate devaluation as we approach spring-summer of 2026.
Should You Buy Dollars Now? Recommendations for Investors
The main practical question that concerns many is whether it is time to rush and buy dollars (or euros) now, taking advantage of their "low" price? The answer depends on your goals, but panicked currency purchases now are hardly justified. Here are several considerations for individual investors and savers:
- Don't Expect Currency to be a Quick Way to Earn Money. In recent months, the ruble has strengthened, and those who bought dollars earlier at their peak have incurred losses. For example, purchasing $1,000 at the end of 2024 would have cost more than 100,000 rubles, whereas today those dollars are worth around 75–80,000 rubles. The loss in value is approximately 25%. Moreover, during this time, there has been missed income from investing the same money in a ruble deposit at a high interest rate. Thus, savings in a foreign currency are losing out compared to ruble instruments when the ruble is rising. There are no guarantees that the situation will shift dramatically in the coming weeks. Therefore, buying dollars "in hopes of exchange rate growth" now looks like a speculative and risky strategy.
- Ruble Assets Are Providing High Returns Now. Thanks to high rates on deposits and bonds, you can achieve double-digit yields in rubles. This yield already compensates for possible ruble weakening in the future by several tens of percent. Simply put, even if the dollar rises to 90 rubles in a year (a +20% increase), a deposit yielding 20% per annum would yield a comparable profit, offsetting exchange rate growth. And if the exchange rate remains closer to current values, the benefits of ruble instruments will be apparent. In light of this, most financial advisors currently do not recommend keeping all savings in foreign currency—ruble instruments have become too attractive.
- Buying Currency Makes Sense for Specific Goals. If you have planned expenses in dollars or euros, such as a trip abroad, paying for education, or purchasing imported goods, the current exchange rate is indeed advantageous for conversion. The currency has depreciated, allowing you to save. In such cases, it is advisable to purchase the necessary amount gradually, in parts, to mitigate the risks of exchange rate fluctuations. For example, if a trip is in a couple of months, consider purchasing currency little by little each week. The average purchase rate will be comfortable.
- Dollar as a "Safety Cushion"—Only in Terms of Diversification. It is always prudent to hold part of your savings in different assets. If you are concerned about the long-term stability of the ruble, there is nothing stopping you from acquiring some amount of currency as a "backup." However, approach this without haste: convert a reasonable portion into dollars—one that you are willing to lose for the sake of insurance against worse-case scenarios. At the same time, do not rush to sell all your ruble investments. The optimal strategy is to distribute your capital: for example, some in rubles in deposits/OFZ, some in cash or foreign currency accounts, and some in other assets (precious metals, stocks, etc.). This diversification will allow you to feel safe regardless of any developments in the situation.
- If You Already Have Currency in Your Portfolio. Many Russians have partially kept savings in dollars or euros since previous times. Since dollars have depreciated, the question arises—what to do with them? Financial experts advise against putting all your eggs in one basket. It makes sense to leverage the strong ruble and rebalance your portfolio: for instance, convert some portion of your foreign currency savings back into rubles and place them at a high interest rate. This will increase the overall return on your capital. The other portion of your currency can remain as long-term insurance. In the future, you may gradually adjust proportions based on market developments.
Conclusion: The current situation in the currency market calls for calm and measured actions rather than haste. The ruble is strong now for objective reasons. Rushing to exchange all your ruble savings for dollars out of fear of "missing the moment" is unwise—there is a significant risk of incurring losses or missing out on gains. On the other hand, complete abandonment of foreign currency is also unnecessary: it still plays a role as a protective asset against unforeseen shocks. The optimal tactic for a broad range of investors is to coldly assess their needs and horizons. Utilize the strong ruble to maximize benefits (high rates, cheaper import purchases) while adhering to the principle of diversification, keeping a moderate share of savings in reliable foreign currency. This approach will help you feel secure regardless of the ruble's course.
