The Russian ruble’s recent surge against the U.S. dollar—a remarkable 40% increase since the start of 2025—is a striking development that demands careful consideration. While some might attribute this solely to easing tensions between Russia and the United States, a deeper analysis suggests a more complex interplay of factors at play. The narrative of a simple geopolitical détente doesn’t fully account for the magnitude of this shift.
The substantial increase in Russia’s M2 money supply, approximately 100% since February 2022, significantly impacts this ruble’s strength. This massive injection of rubles into the economy, while potentially fueling inflation domestically, is seemingly being offset by deliberate manipulation of exchange rates.… Continue reading
The Russian ruble plummeted to its lowest point since March 2022, reaching 114 against the dollar, prompting the central bank to intervene and halt foreign currency purchases for the remainder of the year to curb market volatility. President Putin attributed the fluctuations to budget payments and seasonal factors, while Kremlin spokesperson Dmitry Peskov downplayed the impact on ordinary citizens. However, experts like Timothy Ash of BlueBay Asset Management view the weakening ruble as a sign of a worsening economic crisis, exacerbated by new US sanctions on Gazprombank and the ongoing war in Ukraine. This economic decline is characterized by high inflation, despite interest rate hikes, and is further complicated by the government’s increased defense spending.
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The Russian ruble has fallen to its lowest level against the US dollar since the beginning of the Ukraine invasion, reaching 107 rubles per dollar—a two-year low. This significant depreciation is attributed to ongoing sanctions impacting the Russian economy, particularly the recent targeting of Gazprombank, hindering international payments and further reducing gas export revenue. The upcoming holiday season is expected to exacerbate the situation, increasing import demand and putting additional pressure on the ruble. While a weaker ruble may benefit exports, the resulting high inflation (currently 8.5 percent) and the Central Bank’s attempts to counteract it through interest rate hikes are proving insufficient to stabilize the currency.
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Matt Underwood 
John Q. Hosedrinker