Why the Ruble is Strengthening While Searches for "Dollar Depreciation" Hit Records: Macroeconomic Reasons, the Impact of the Central Bank of Russia's Policy, and What This Means for Investors in 2025.
Unexpectedly Strong Ruble by Year-End
By the end of 2025, the Russian ruble displays an unexpected strength. The rates of major foreign currencies have noticeably declined: the US dollar has dropped to approximately 75-77 rubles, and the euro to 90 rubles, marking the lowest levels in the past two and a half years. This swift appreciation of the ruble has garnered widespread attention: according to Google data, the number of searches for " dollar depreciation" has surged to a historic quarterly high. Typically, by December, the ruble weakens due to increased imports around the holidays and budgetary spending; however, the current situation defies these stereotypes. Investors and ordinary citizens are concerned and are trying to understand the reasons behind the strengthening of the national currency and whether now is the time to rush to currency exchange offices for dollars.
Trade Surplus and Import Restrictions
One fundamental reason for the ruble's strengthening is Russia's significant positive trade balance. Exports considerably exceed imports, ensuring a steady inflow of foreign currency into the country:
- High Export Revenues. Due to the export of energy resources and other goods, Russia continues to receive substantial amounts of foreign currency revenue. Even considering sanctions and falling oil prices, export volumes remain significant. Moreover, non-energy exports have recently shown growth, further increasing currency inflow.
- Decline in Imports. The import of goods into the Russian Federation remains relatively low. Sanctions and governmental measures—such as increased recycling fees and other restrictions that limit the import of foreign goods (vehicles, equipment, etc.)—are having an impact. 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, which all reduces purchasing power and the need for imported goods. As a result, the demand from importers for foreign currency remains low.
- Deducrre dollarization of settlements. The share of transactions in national currencies has increased. Russia and its trading partners are increasingly switching to rubles, yuans, and other "alternative" currencies in foreign trade. Many deals for exported goods are now conducted without involving dollars or euros. This reduces the direct demand for reserve currencies in the domestic market. At the same time, the country has reduced its dependence on the ruble's exchange rate from fluctuations in oil prices due to the budgetary rule mechanism.
- Cryptocurrencies as "Hidden Exports." A new factor has emerged: a portion of international transactions is being conducted through cryptocurrencies. According to officials' estimates, substantial amounts for imported supplies may be paid with cryptocurrency. In effect, this means that Russian exporters, for example, of energy resources receive not goods or dollars, but digital assets, which can then be converted. This hidden export brings additional currency revenue and reduces the need for official dollars to pay for imports. All of this contributes to the strengthening of the ruble.
Monetary Policy and Financial Factors
Another group of reasons is related to the financial system and the policies of regulators. Tight monetary conditions within the country significantly support the ruble:
- High Interest Rates of the Central Bank of Russia. The key interest rate of the Bank of Russia is at double-digit levels (around 17% per annum). Such high rates have made ruble instruments extremely attractive for investors and depositors. Banks are offering 15-20% annual interest on deposits, and reliable bonds provide high coupons—all of which encourage saving in rubles rather than in foreign currency. Both the public and businesses are less inclined to purchase dollars or euros, which yield no income compared to the significant profits available in rubles.
- Influx of Rubles from Exporters. Exporters receiving revenue in foreign currency sell a significant portion on the domestic market. This is partly due to legal requirements and partly a rational decision: to convert dollars into rubles to invest them at high interest rates or to finance expenses domestically. Given the high rates, even exporters are interested in quickly converting foreign currency into rubles and earning interest rather than holding assets in depreciating dollars.
- Reduced Capital Outflow. Russia's financial market has become more "closed." After 2022, the country's and corporations' external debt has significantly decreased, and access to external capital markets has been restricted. Foreign investors have largely exited the Russian market. Consequently, the demand for currency to service external debts or transfer funds abroad has diminished remarkably. Strict capital movement restrictions (though recently softened for individuals) also play a role: rubles predominantly remain within the country. The exchange rate is now primarily determined by the balance of exporters and importers without the previous pressure from financial speculators or panic among the public.
- Currency Interventions under the Budget Rule. An additional factor has been the Ministry of Finance's and the Central Bank's policies in the currency market. In recent months, the government has actively sold foreign currency from the National Wealth Fund using "mirror" transactions under the budgetary rule. Since December 5, the volume of currency sales has sharply increased—according to the Ministry of Finance, to the equivalent of around 14.5 billion rubles daily, approximately 1.5 times higher than in the fall. Essentially, the regulator is injecting a substantial portion of dollars and euros into the market daily, buying rubles in return. This creates an oversupply of currency, preventing the dollar's value from rising, thereby supporting the ruble's strength.
- Weakness of the Dollar in the Global Market. The appreciation of the ruble is not occurring in a vacuum—it is also supported by external factors. The American dollar has weakened globally by the end of 2025: investors are anticipating a rapid decrease in the Federal Reserve's interest rates and a softening of monetary policies. The DXY index (dollar exchange rate against major world currencies) has dropped to its lowest levels in recent years. The dollar is depreciating against many currencies, and the ruble is no exception. Furthermore, the anticipated change in power in the US towards an administration more oriented towards a weaker dollar (according to analysts, this course may be pursued by the new financial authorities) is putting pressure on the American currency. Thus, external factors are also playing in favor of the ruble.
- Geopolitical Expectations. Finally, geopolitical considerations are influencing market sentiment. By year-end, there have been cautious hopes for a softening of international tensions—partly due to diplomatic signals. Although there are no concrete peace agreements yet, some market participants have priced in the expectation of a more favorable scenario for the future. This has reduced panic demand for currency "for a rainy day" among the public and businesses. Any positive news (e.g., expanding cooperation with major partners like India or hints at potential negotiations to resolve conflicts) supports the ruble. However, experts emphasize that the geopolitical factor is rather psychological—it may have accelerated the current strengthening, but on its own, it cannot sustain the ruble long-term without support from other fundamental reasons.
Pros and Cons of a Strong Ruble for the Economy
Such a sharp strengthening 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 reduces costs for importer companies on raw materials and components. Traveling abroad and paying for services in foreign currencies (tourism, education, foreign services) become cheaper for Russians. A strong ruble, in general, increases trust in the national currency and financial stability—savings in rubles depreciate more slowly, positively impacting domestic consumption.
- Cons for the Budget and Exporters: The Russian economy is historically export-oriented, so an excessively strong ruble penalizes exporters. Companies selling their goods abroad for dollars or euros (oil and gas, metallurgy, chemicals, etc.) receive fewer rubles upon converting revenues. Their profitability drops, which may lead to a reduction in investment, development costs, and even declines in production volumes. The state budget receives less revenue from export duties and taxes: oil and gas revenues in rubles sharply decline as the ruble strengthens, exacerbating the budget deficit. Ultimately, an overly strong ruble poses a challenge to economic growth: export-oriented sectors, which are the drivers of the economy, lose profitability. If this situation persists, negative consequences for employment in these sectors and budgetary receipts may arise. The government effectively has to balance between the goal of suppressing inflation (where a strong ruble is helpful) and supporting export-oriented sectors (which need a weaker ruble for comfortable operation).
How Authorities Respond to the Strengthening Ruble
This unusual currency dynamic has not gone unnoticed by the country's leadership. Russian authorities openly admit that an excessively strong ruble creates problems. The head of the Ministry of Economic Development, Maxim Reshetnikov, labeled the current ruble strengthening—nearly a quarter of its value since the beginning of the year—as one of the main challenges for the economy and stated, "a strong ruble is a new reality that we will have to consider." There is ongoing discussion in business circles and the government about whether a currency corridor or other measures are needed to weaken the ruble; however, the Ministry of Finance has stated its opposition to direct currency management. Finance Minister Anton Siluanov remarked that the floating exchange rate reflects the balance of supply and demand under current conditions and roughly corresponds to the parameters of the balance of payments. In simpler terms, the authorities do not plan to artificially revert to a fixed exchange rate—rather, the economy is encouraged to adapt to a strong ruble.
Nevertheless, indirect measures to regulate the situation are being taken. As mentioned, since December, the Ministry of Finance has increased currency sales from reserves, attempting to smooth out exchange rate 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. As of December 8, the regulator lifted the remaining limits on currency transfers abroad for Russian citizens and "friendly" non-residents. Previously, individuals could send no more than $1 million per month abroad—this restriction has now been lifted. The Central Bank explained the decision by the stability in the currency market. Some experts believe that lifting the limits is a step toward a more market-oriented formation of the exchange rate: it increases the flexibility of transactions, reduces the incentive to utilize grey capital withdrawal schemes, and importantly—aids in releasing "steam" from the overheated currency market, slightly increasing capital outflows.
Additionally, there are discussions around stimulating imports. Maxim Oreshkin, the economic advisor to the president, noted that to return to a weaker ruble in the long term, the government may need to pursue an aggressive policy to increase imports in specific segments—i.e., consciously increasing currency demand. For now, however, official statements convey confidence that the situation is controlled. Regulators indicate that they possess adequate tools to prevent excessive strengthening or abrupt volatility of the ruble when necessary. Overall, the policy aims to smooth out extreme exchange rate fluctuations without obstructing market trends: a strong ruble is used as an ally in combating inflation, but the authorities also strive to avert a scenario where the rate becomes "too good to be true" and damages the budget.
Outlook: How Long Will the Ruble Remain Strong?
The main question for investors and businesses is whether the current rate around 75-80 rubles per dollar will persist for an extended period. The consensus among most analysts is that in the short term, until the end of the year, the ruble will remain relatively strong in the absence of external shocks. All the factors mentioned—ranging from export revenues to the Central Bank's policies—support this scenario. Many investment firms have revised their forecasts, now expecting the year to close with an exchange rate between 75-78 rubles per $ and 90 ± 5 rubles per €. It is possible that leading up to the New Year festivities, the ruble may weaken slightly due to seasonally increased consumer and corporate expenditures (including for imported goods) and capital outflows; however, no significant deviations are anticipated. The regulator will continue selling foreign currency to smooth heightened demand, so sharp fluctuations in the exchange rate are unlikely.
In 2026, experts predict a gradual weakening of the ruble. Keeping the national currency this strong permanently is difficult and economically disadvantageous. The baseline scenario from major banks and analytical centers anticipates a return of the dollar rate to 85-95 rubles over the course of the year. Some forecasts for the end of 2026 suggest a range of around 90-100 rubles per dollar. This is driven by changes in the same factors currently supporting the ruble. Firstly, a softening of monetary policy is expected: if inflation in Russia continues to decelerate, the Bank of Russia could begin gradually lowering the key rate. Predictions are emerging that as early as the first half of 2026, the rate could drop from the current heights (17%) to 14-15%. The cheaper ruble loans and declining deposit rates will make rubles less attractive for speculative operations and will again increase the tendency for businesses and individuals to buy currency.
Secondly, the scale of currency interventions will decrease. The Ministry of Finance does not plan to sell foreign currency indefinitely: the volumes of sales under the budget rule may be reduced in the new year, especially if oil prices rebound slightly. This will remove part of the support that the ruble currently receives from the government. Thirdly, a rise in imports is possible. The economy cannot indefinitely satisfy all demand solely through domestic production—sooner or later companies will begin to procure more equipment, components, and goods from abroad, especially as they adapt to sanctions. Furthermore, the VAT increase on January 1, 2026, may prompt businesses to stock up on imported goods in advance, thus increasing demand for currency. Traditionally, the populace also tends to spend more money during the winter holidays, including traveling abroad, which temporarily increases demand for dollars and euros.
Finally, geopolitical factors must not be underestimated. Should a détente occur—such as the hypothetical conclusion of peace agreements and subsequent partial lifting of sanctions—the ruble could receive another boost in strengthening. Some optimistic forecasts suggest that under favorable circumstances, the dollar rate could briefly return to 70–75 rubles 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 prevail, and an excessively strong ruble will retreat nonetheless. Conversely, if the geopolitical situation remains tense or deteriorates—new sanctions, risks to exports—it could speed up the ruble's weakening.
Overall, the consensus is that the current exceptionally strong ruble is a phenomenon supported by a combination of unique factors, and it is unlikely that it will persist throughout the next year without changes. Most likely, the ruble exchange rate will gradually shift back to a more "comfortable" range for the economy. Experts do not anticipate a sharp collapse of the national currency—unless an unforeseen force majeure occurs, the ruble's weakening will be gradual. In other words, the scenario of a dollar fetching 100 rubles might return, but not abruptly tomorrow; rather, it will likely result from a gradual process throughout 2026. Likewise, a return to extremely low values (50-60 rubles per dollar, as seen a few years ago) is not in sight—too much has changed in the economy. We can expect relative stability of the ruble in winter and moderate depreciation by the spring-summer of 2026.
Should You Buy Dollars Now: Recommendations for Investors
The main practical question troubling many is whether they should rush to buy dollars (or euros) now, taking advantage of their "low" price. The answer depends on your objectives, but panic buying of currency at this moment is unlikely to be justified. Here are several considerations for individual investors and savers:
- Don’t rely on currency as a quick profit-making tool. In recent months, the ruble has strengthened, and those who bought dollars at their peak have incurred losses. For example, purchasing $1,000 at the end of 2024 would have cost over 100,000 rubles, whereas today those dollars are worth around 75-80,000 rubles. The loss in value amounted to around 25%. Moreover, in the meantime, there has been missed profit from investing the same money in a ruble deposit at a high interest rate. This means that savings in foreign currency are losing out to ruble instruments when the ruble strengthens. There is no guarantee that the situation will reverse sharply in the coming weeks. Thus, buying dollars "in hopes of a rate increase" now looks like a speculative and risky strategy.
- Ruble assets are currently yielding high returns. Thanks to high rates on deposits and bonds, you can achieve double-digit returns in rubles. This yield already compensates for potential future weakening of the ruble by several percentage points. In simpler terms, even if the dollar appreciates from, say, 75 to 90 rubles (+20%) over the next year, a deposit at 20% per annum will provide comparable profit, offsetting exchange rate growth. And if the exchange rate remains close to current values, the benefits from ruble instruments will be apparent. Considering this, most financial advisors currently do not recommend holding all savings in foreign currency—ruble instruments have become too attractive.
- Buying currency makes sense for specific purposes. If you have planned expenses in dollars or euros—such as a trip abroad, educational payments, or purchasing imports—the current rate is indeed advantageous for conversion. The currency has become cheaper, and you can save. In such cases, it’s wise to acquire the necessary sum gradually, in parts, to reduce risks from exchange rate fluctuations. For instance, if your trip is in a couple of months, you can buy currency bit by bit each week. This way, the average purchase rate will be favorable.
- Dollars as a "safety net" only within diversification. It's always prudent to keep part of your savings in different assets. If you're concerned about the long-term stability of the ruble, there's nothing preventing you from buying a small share of currency "for a rainy day." Approach this thoughtfully: convert a reasonable portion—one you are comfortable losing for the sake of protection against worse scenarios. Avoid hastily selling all ruble investments. The optimal strategy is to diversify your capital: for example, part in rubles in deposits/OFZs, part in cash or accounts in foreign currency, and part in other assets (precious metals, stocks, etc.). This diversification will allow you to feel secure regardless of currency fluctuations.
- If you already have currency in your portfolio. Many Russians' savings are partially held in dollars or euros from previous times. The present low dollar rate raises the question—what should be done with them? Financial experts advise against putting all your eggs in one basket. It makes sense to take advantage of a strong ruble and rebalance your portfolio: for instance, convert a portion of your foreign currency savings back into rubles and invest them at a high interest rate. This will enhance the overall yield of your capital. Let the other part of your currency remain as long-term insurance. Moving forward, you can gradually adjust proportions based on market conditions.
Conclusion: The current situation in the currency market calls for calm and considered actions rather than panic. The ruble is strong now for objective reasons. It is not advisable to rush and exchange all your ruble savings for dollars in fear of "missing the moment"—there's a high risk of incurring losses or missing out on benefits. Conversely, a complete abandonment of foreign currency isn't necessary either; it still plays a role as a protective asset against unforeseen shocks. The optimal tactic for a broad range of investors is to objectively assess their needs and horizons. Take advantage of a strong ruble to maximize benefits (high rates, cheaper imports) while adhering to the principle of diversification by maintaining a moderate share of savings in reliable foreign currency. Such an approach will help you feel secure no matter the ruble's exchange rate.
