As Bloomberg notes in its article, the Russian currency has appreciated by 45% in 2025 and surprised not only international analysts, but to some extent, the Russian authorities as well. In the outgoing year, the ruble appreciated at the fastest pace since 1994.
The key factor in the ruble’s appreciation was a sharp decline in demand for foreign currency in Russia in the face of international sanctions, as well as an exceptionally tight monetary policy, increasing the attractiveness of ruble assets in the eyes of residents, Bloomberg writes. And states that the ruble’s advance puts it in the top five global assets in terms of spot yields.
However, economists warn that this strengthening of the Russian currency is increasingly becoming a threat, could lead to stagflation and weaken the competitiveness of the Russian economy, writes the publication. And they argue that such appreciation of the national currency came as a surprise to the Russian authorities, who were taken by surprise by this trend.
For the Bank of Russia, the ruble appreciation is a welcome step in the fight against inflation, and its head Elvira Nabiullina is signaling that the disinflationary effect has not yet been exhausted. However, economists at Moscow’s Pyotr Stolypin Institute for Growth Economics warn that ruble appreciation is increasingly becoming a threat. This could seriously affect the Russian economy’s declining competitiveness and slow down its growth.
In this regard, Russian specialized agencies have begun to take significant steps to avoid unfavorable development of the situation. The key rate of the Russian Central Bank remained at a record high level from October last year to June 2025, after which the regulator lowered it by as much as five percentage points to 16%.
Steps are also being taken to support the budget. The Russian government predicted an average exchange rate of 91.2 rubles per dollar for this year. The ruble has maintained its strong position despite the decline in oil prices and new US and EU sanctions, which have increased the burden on public finances, reducing exporters’ revenues when they are converted into rubles.
In this situation, the Bank of Russia has been making periodic sales of foreign currency, while the finance ministry is slowly getting rid of yuan and gold in the National Welfare Fund to make up for the loss of profits from the sale of energy resources. Ministry data indicate that budget revenues from oil and gas sales fell 22% in the first 11 months of the year.
