Why the Ruble is Strengthening, While Searches for "Dollar Devaluation" Reach Record Highs: Macroeconomic Reasons, the Influence of the Central Bank of Russia, and What This Means for Investors in 2025
Unexpected Strength of the Ruble at Year-End
At the end of 2025, the Russian ruble is showing unexpected strength. The exchange rates of major foreign currencies have dropped significantly: the US dollar has fallen to approximately 75–77 rubles, while the euro stands at 90 rubles, the lowest values seen in the last two and a half years. This rapid appreciation of the ruble has attracted public interest: according to Google data, the number of search queries regarding “dollar devaluation” has skyrocketed to a historic quarterly high. Typically, by December, the ruble weakens (due to increased imports ahead of the holidays and budget spending), but the current situation breaks established stereotypes. Investors and ordinary citizens are concerned and are trying to grasp the underlying reasons for the national currency's strengthening, and whether it's time to rush to currency exchanges for dollars.
Trade Surplus and Import Restrictions
One fundamental reason for the ruble's appreciation is the significant positive trade balance of Russia. Exports considerably exceed imports, ensuring a stable influx of foreign currency into the country:
- High Export Revenues. Thanks to energy exports and other goods, Russia continues to receive a substantial volume of foreign currency revenue. Even considering sanctions and falling oil prices, export volumes remain significant. Additionally, 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 – are limiting the influx of foreign goods (cars, machinery, etc.). The import substitution strategy creates additional barriers for foreign products. Moreover, domestic demand has weakened: economic growth has slowed, real incomes are modestly rising, and an increase in VAT looms ahead – all of which restrict purchasing power and the need for imported goods. Consequently, the demand for foreign currency from importers remains low.
- Dollarization of Payments. The share of transactions conducted in national currencies has increased. Russia and its trading partners are increasingly using rubles, yuan, and other “alternative” currencies in foreign trade. Many export transactions are now completed without the involvement of dollars or euros. This reduces the direct demand for reserve currencies in the domestic market. Additionally, the country’s dependence of the ruble’s exchange rate on fluctuations in oil prices has decreased due to the budget rule mechanism.
- Cryptocurrency as a "Hidden Export." A new factor has emerged: part of international transactions is being carried out through cryptocurrencies. Officials estimate that significant amounts for imported goods may be paid in cryptocurrency. This essentially means that Russian exporters, for example, of energy resources receive not goods or dollars in return, but digital assets, which can then be converted. This hidden export brings additional currency revenue and reduces the need for official dollars for paying imports. All of this plays in favor of the ruble’s strengthening.
Monetary Policy and Financial Factors
Another group of reasons relates to the financial system and regulatory policies. Tight monetary conditions within the country significantly support the ruble:
- High Interest Rates of the Central Bank of Russia. The key rate of the Bank of Russia is at a double-digit level (around 17% per year). Such high rates have made ruble-denominated instruments extremely attractive for investors and depositors. Banks offer interest rates of 15–20% on deposits, and reliable bonds provide high yields – all of which encourages the storage of savings in rubles rather than in foreign currency. Both the population and businesses are less interested in buying dollars or euros, which yield no income when substantial profits can be obtained in rubles.
- Influx of Rubles from Exporters. Exporters earning revenue in foreign currencies sell a significant portion of it on the domestic market. Partly due to legal requirements and partly for pragmatic reasons: converting dollars into rubles to place them at high interest rates or cover expenses domestically. In the context of high rates, even exporters are eager to convert their currency into rubles quickly to earn interest instead of holding their funds in “depreciating” dollars.
- Reduction in Capital Outflow. The Russian financial market has become more "closed." After 2022, the country's and corporations' foreign debt has decreased significantly, and access to external capital markets is blocked. Foreign investors have predominantly exited the Russian market. As a result, the need for currency to repay external debts or withdraw funds abroad has diminished significantly. Strict capital movement restrictions (though recently relaxed for individuals) also play a role: rubles mainly remain within the country. The exchange rate is now primarily formed by the balance of exporters and importers, without the previous pressure from financial speculators or panic among the population.
- Currency Interventions Based on the Budget Rule. An additional factor has been the Ministry of Finance and the Central Bank’s policy in the currency market. In recent months, the state has been actively selling foreign currencies from the National Welfare Fund through "mirror" operations per the budget rule. Since December 5, the volume of currency sales has sharply increased – according to the Ministry of Finance, to the equivalent of about 14.5 billion rubles per day, which is approximately 1.5 times higher than in autumn. Essentially, the regulator is daily releasing a substantial portion of dollars and euros into the market, buying rubles in return. This creates an excess supply of currency and prevents the dollar's exchange rate from rising, thus supporting the strength of the ruble.
- Weakness of the Dollar in the Global Market. The strengthening of the ruble does not occur in a vacuum – it is also facilitated by external factors. The US dollar globally weakened at the end of 2025: investors expect an imminent reduction in the US Federal Reserve’s interest rates and a relaxation of monetary policy. The DXY index (the dollar against major world currencies) has dropped to its lowest levels in recent years. The dollar is losing value against many currencies, and the ruble is no exception. Additionally, the anticipated transition to a US administration oriented toward a weaker dollar (as analysts believe the new composition of financial authorities may pursue this course) pressures the American currency. Thus, external factors are also playing in favor of the ruble.
- Geopolitical Expectations. Finally, market sentiments are influenced by geopolitics. At year-end, there emerged cautious hopes for a reduction in international tensions – partly thanks to diplomatic signals. Although there are no specific peace agreements yet, some market participants have begun to factor in more favorable future scenarios. This has reduced panic buying for currency "for a rainy day" among the population and businesses. Any positive news (such as expanded cooperation with major partners like India or hints at possible negotiations to resolve conflict) supports the ruble. Nevertheless, experts emphasize that the geopolitical factor is more psychological – it may have accelerated the current strengthening, but in itself, it cannot maintain the ruble long-term without the support of other fundamental reasons.
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 from a strong ruble.
- Pros for Citizens and Importers: The strengthening of the ruble curbs inflation. Prices for imported goods (electronics, cars, clothing, fruits, etc.) either stop rising or decrease in ruble terms. This supports the real purchasing power of the population and lowers costs for companies importing raw materials and components. Travel abroad and payments for services in foreign currencies (tourism, education, international services) become cheaper for Russians. A strong ruble overall enhances confidence in the national currency and financial stability – savings in rubles devalue more slowly, positively impacting domestic consumption.
- Cons for the Budget and Exporters: The Russian economy has traditionally been export-oriented, so an overly expensive ruble negatively affects exporters. Companies selling their goods abroad for dollars or euros (oil and gas, metallurgy, chemicals, etc.) receive less in rubles upon currency conversion. Their profitability decreases, which may lead to reduced investments, development expenditures, and even lower volumes of output/production. The state budget suffers from lower ruble revenues from export duties and taxes: oil and gas revenues in rubles have sharply decreased as the ruble has strengthened, exacerbating budget deficits. As a result, an overly strong ruble poses a challenge for economic growth: export-oriented sectors that drive the economy are losing profitability. If this situation persists, negative consequences for employment in these sectors and for budget revenues are possible. The government effectively has to balance the goal of suppressing inflation (where a strong ruble helps) and supporting export-oriented sectors (which require a weaker ruble for comfortable operation).
How Authorities React to the Strengthening Ruble
The unusual dynamics of the exchange rate have not gone unnoticed by the country's leadership. Russian authorities openly acknowledge that an extremely strong ruble creates problems. The Minister of Economic Development Maxim Reshetnikov referred to the current strengthening of the ruble – nearly a quarter since the beginning of the year – as one of the main challenges for the economy, stating that “a strong ruble is a new reality to be accounted for.” A discussion has unfolded in business circles and among government officials regarding whether a currency corridor or other measures are necessary to weaken the ruble, but the Ministry of Finance has expressed opposition to direct management of the rate. Finance Minister Anton Siluanov stated that a floating rate, under current conditions, reflects the balance of supply and demand and approximately aligns with the parameters of the balance of payments. In simpler terms, authorities do not plan to artificially revert to a fixed rate – the economy is encouraged to adapt to the strong ruble.
Nevertheless, indirect measures to regulate the situation are being taken. As already noted, the Ministry of Finance has increased foreign currency sales from reserves since December, attempting to smooth exchange rate fluctuations and partially compensate for seasonal increases in demand for foreign currency toward the year's end. Simultaneously, the Central Bank has begun to gradually ease previously introduced foreign currency restrictions. As of December 8, the regulator lifted remaining limits on foreign currency transfers abroad for Russian citizens and “friendly” non-residents. Previously, individuals could transfer no more than $1 million abroad monthly – this restriction has now been removed. The Central Bank justified this decision with the stability of the currency market. Some experts believe that lifting limits is a step towards a more market-driven formation of the exchange rate: it increases the flexibility of settlements, reduces the incentive to use gray capital withdrawal schemes, and importantly – allows “steam” to be released from the overheated currency market, slightly increasing the outflow of currency.
Furthermore, there is also a discussion about stimulating imports. M. Oreshkin, economic adviser to the president, noted that for a return to a weaker ruble in the future, the government may need to pursue an aggressive policy of increasing imports in certain segments – that is, consciously increasing demand for currency. For now, though, official statements convey confidence that the situation is under control. Regulators convey that they have sufficient tools to prevent excessive strengthening or sharp volatility of the ruble if needed. In general, the policy aims to smooth extreme fluctuations in the rate without interfering with market trends: a strong ruble is used as an ally in the fight against inflation, while authorities strive to prevent a scenario where the rate becomes “too good to be true” and harms the budget.
Outlook: Will the Ruble Stay Strong Long-Term?
The main question for investors and businesses is whether the current rate around 75–80 rubles per dollar will remain for an extended period. Most 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 mentioned – from export revenues to the policy of the Central Bank. Many investment firms have adjusted their forecasts and now expect to close the year with rates in the range of 75–78 ₽ per $ and 90 ± 5 ₽ per €. There may be slight weakening of the ruble ahead of the New Year holidays due to seasonal increases in consumer and corporate expenditures (including on imported goods) and currency outflows, but significant deviations are not anticipated. The regulator will continue to sell foreign currency, smoothing increased demand, so sharp exchange rate fluctuations are unlikely.
In 2026, experts expect a gradual weakening of the ruble. Maintaining the national currency at such strength is difficult and not beneficial for the economy itself. The baseline scenario from major banks and analytical centers anticipates a return of the dollar rate to around 85–95 rubles over the year. Some forecasts for the end of 2026 suggest a range of around 90–100 rubles per dollar. The reasons stem from changing the same factors that currently support the ruble. Firstly, a softening of monetary policy is anticipated: if inflation in Russia continues to decelerate, the Bank of Russia may begin to gradually lower the key rate. Forecasts suggest that by the first half of 2026, the rate could drop from the current heights (17%) to 14–15%. The reduction in the cost of ruble loans and deposit interest rates will diminish the attractiveness of the ruble for speculative operations and increase the propensity of businesses and citizens to purchase foreign currency again.
Secondly, the scale of currency interventions will shrink. The Ministry of Finance does not plan to sell foreign currency indefinitely: sales volumes per the budget rule in the new year are likely to be reduced, particularly if oil prices recover slightly. This will remove some of the support that the ruble is currently receiving from the state. Thirdly, an increase in imports is possible. The economy cannot satisfy all demand solely through domestic production for long – sooner or later, companies will begin to procure more equipment, components, and goods from abroad, especially as they adapt to sanctions. Additionally, the increase in VAT starting January 1, 2026, may prompt businesses to purchase imported goods in advance, increasing demand for currency. Furthermore, individuals traditionally spend more during the winter holiday period, including traveling abroad, temporarily boosting demand for dollars and euros.
Finally, we should not disregard the commodity market. If oil and gas prices remain low or decline further, export revenues will drop – thereby diminishing the grounds for the current surplus in the current account, and the ruble may weaken more quickly. Conversely, in a scenario of a sharp rise in energy prices, Russia may again see an influx of additional currency, which could slow the ruble's depreciation.
Geopolitical factors will also contribute. In the event of a de-escalation – for instance, a hypothetical peace agreement and subsequent partial lifting of sanctions – the ruble may receive another boost in strength. Some optimistic forecasts suggest that under favorable circumstances, the exchange rate in the first quarter of 2026 could briefly return to 70–75 ₽ per $. However, even the authors of such scenarios caution that this would be a one-off, emotional strengthening: in the long run, fundamental economic factors will prevail, and the ruble will eventually retreat from being too strong. If the geopolitical situation remains tense or worsens – with new sanctions and risks for exports – this, conversely, will accelerate the ruble's weakening.
Overall, the consensus is as follows: the current super-strong ruble is a phenomenon supported by a combination of unique factors, and it is unlikely to last throughout the next year without changes. Most probably, the ruble's exchange rate will gradually shift into a more “comfortable” range for the economy. A sharp collapse of the national currency is not anticipated – barring unforeseen circumstances, the ruble's weakening will be gradual. In other words, a dollar at 100 rubles may return, but not abruptly tomorrow; rather, it would result from a gradual process throughout 2026. At the same time, a return to extremely low values (50–60 ₽ per $, as seen a few years ago) also seems unlikely – too many changes have occurred in the economy. We are more likely to see relative stability of the ruble in winter and moderate depreciation as we approach spring-summer 2026.
Should You Buy Dollars Now: Recommendations for Investors
The main practical question on many minds: is it advisable to rush and buy dollars (or euros) now, taking advantage of their “low” price? The answer depends on your goals, but panic buying of currency now is hardly justified. Here are several considerations for private investors and savings holders:
- Don’t Count on Currency as a Quick Earning Tool. In recent months, the ruble has strengthened, and those who bought dollars previously at a peak have incurred losses. For instance, purchasing $1,000 at the end of 2024 would have cost over 100,000 rubles, whereas today those dollars are worth about 75–80 thousand rubles. The depreciation amounts to around 25%. Additionally, during this time, one could have missed out on profits by investing that same money in a ruble deposit at a high interest rate. Thus, holding savings in foreign currency has been less beneficial than ruble-denominated instruments when the ruble strengthens. There is no guarantee that the situation will dramatically shift in the upcoming weeks. Therefore, buying dollars “in hopes of an exchange rate rise” now appears to be a speculative and risky strategy.
- Ruble Assets Yield High Returns Now. Thanks to high rates on deposits and bonds, you can achieve double-digit returns in rubles. This yield already compensates for potential depreciation of the ruble in the future by several dozen percent. In simpler terms, even if the dollar appreciates from 75 to 90 rubles (+20%) in a year, a deposit earning 20% per annum will yield comparable income, offsetting exchange rate growth. And if the rate maintains closer to current values, the benefits of ruble-denominated instruments will be clear. Considering this, most financial advisors currently do not recommend holding all savings in foreign currency – ruble instruments have become too attractive.
- Purchasing Currency Makes Sense for Specific Goals. If you have upcoming expenses in dollars or euros – travel abroad, paying for education, buying imported goods – the current exchange rate is indeed favorable for conversion. Currency has depreciated, and you could save money. In such cases, it is wise to acquire the necessary amount gradually, in parts, to mitigate currency fluctuation risks. For example, if a trip is in a couple of months, buying currency incrementally each week could yield a comfortable average purchase rate.
- Dollars as a "Safety Cushion" – Only as Part of Diversification. It is always wise to keep a portion of your savings in different assets. If you are concerned about the long-term stability of the ruble, there's no reason you cannot acquire a portion of foreign currency “for a rainy day.” However, approach this without haste: convert a reasonable amount into dollars – an amount you can accept losing for hedge against the worst-case scenario. Importantly, do not rush to sell all ruble holdings. The optimal strategy would be to diversify capital: for instance, a portion in ruble deposits/OFZ, a part in cash or foreign currency accounts, and some in other assets (precious metals, stocks, etc.). Such diversification will allow you to feel secure in any scenario.
- If You Already Hold Currency in Your Portfolio. Many Russians have savings partially stored in dollars or euros from previous times. Now that dollars have depreciated, the question arises about what to do with them. Financial experts advise against putting all eggs in one basket. It makes sense to take advantage of a strong ruble and rebalance your portfolio: for example, convert a portion of your currency savings back into rubles and invest them at high interest rates. This will enhance the overall return on your capital. Let another part of the currency remain as long-term insurance. In future, you can gradually adjust proportions based on market conditions.
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. It is unwise to rush to convert all ruble savings into dollars out of fear of “missing the moment” – there is a high risk of incurring losses or missing out on benefits. On the other hand, it is also unnecessary to completely forgo foreign currency: it continues to play a role as a protective asset against unforeseen shocks. The optimal tactic for a broad spectrum of investors is to calmly assess their needs and horizons. Utilize the strong ruble to maximize benefits (high rates, cheaper import purchases) while adhering to the principle of diversification by keeping a moderate portion of your savings in reliable foreign currency. This approach will help you feel confident regardless of the ruble’s exchange rate.
