The Russian currency’s rally has been in part driven by geopolitical optimism over a possible peace deal in the Ukraine conflict, analysts say
The Russian ruble has climbed to a two-year high against the US dollar, supported by easing geopolitical tensions and renewed hopes for resolving the Ukraine conflict.
On Thursday, the Russian currency reached 78.9 against the dollar, its strongest level since mid-May 2023. It has gained about 11% since early March.
The ruble, which has been strengthening for several months, has posted the strongest performance among emerging market currencies since the start of 2025, equity analyst at Alfa-Capital Alina Poptsova has told business daily RBK.
“The market is being driven in part by emotions linked to signs of a potential normalization in ties with the US and a dialogue with Ukraine on a political settlement,” said Natalia Pyrieva, chief analyst at Tsifra Broker.
Analysts say the rally has also been supported by higher sales of foreign currency earnings by exporters ahead of tax and dividend payments, and falling demand from importers. Market participants are reportedly betting on the return of foreign companies to the Russian market, and a possible easing of sanctions.
“Investors are likely pricing in not just progress on diplomacy, but also a potential rollback of infrastructure-related sanctions, a return of foreign capital, and improved FX liquidity – factors that increase the ruble’s appeal,” said Yuri Kravchenko, head of banking and money market research at Veles Capital. He also cited “favorable geopolitical expectations” as the ruble’s key support in recent weeks.
Some experts see room for further gains, projecting the ruble could reach 75 to the dollar this month, if geopolitical momentum continues. However, they caution the rally may be short-lived unless concrete developments follow.
The latest rounds of sanctions, announced by the EU and the UK this week, are unlikely to have a strong impact on the Russian currency, according to the analysts.
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Moscow and Washington have been engaged in high-level diplomacy since US President Donald Trump’s return to office. Trump had repeatedly called for a swift resolution to the conflict and a reset in Russia-US bilateral ties. On Monday, he and the Russian President Vladimir Putin held a two-and-a-half-hour phone call, which both described as productive.
Last week, delegations from Russia and Ukraine met in Istanbul for their first direct talks since Kiev unilaterally withdrew from the peace process in 2022. Russia’s top negotiator, Vladimir Medinsky, later said that both sides had agreed to conduct a prisoner exchange involving 1,000 POWs each and to continue contacts once both had prepared detailed ceasefire proposals.
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