russian-ruble-outperforms-global-currencies-in-2025

Despite the ongoing war with Ukraine, the Russian ruble has proven to be the world’s best-performing currency this year, outpacing even gold, according to financial institutions. The ruble has surged by 38 per cent against the US dollar, marking the strongest gains of any currency worldwide.

 

Analysts attribute the ruble’s impressive performance to a combination of geopolitical factors and fiscal policy decisions made by the Bank of Russia.

 

Sofya Donets, an economist at T-Investments, noted that unlike many emerging-market currencies, the ruble has not faced pressure from capital outflows driven by global investors retreating from riskier assets. 

 

“Capital controls have largely shielded Russia from this,” she added.

 

In usual circumstances, a country at war sees its financial resources and economic activities suffer, with a significant decline in trade, mineral extraction, and foreign reserves. Yet, Russia’s economy has flourished during its conflict with Ukraine, as lower oil prices have helped President Vladimir Putin stabilise the economy.

 

Additionally, Russia has implemented various preventive measures, including high borrowing costs. The Bank of Russia raised its benchmark interest rate to a record 21 per cent to curb inflation, maintaining this rate since then. Experts believe that this move has reduced demand for imports, thus limiting the need for foreign currencies.

 

Further bolstering the ruble, Russia introduced regulations requiring exporters to convert a portion of their foreign earnings into rubles, a policy designed in response to Western sanctions.

 

Analysts also suggest that improved US-Russia relations, bolstered by joint efforts to resolve the Ukraine conflict, have increased foreign investor interest in Russian markets, adding further strength to the ruble.

 

While US President Donald Trump paused most new tariffs for 90 days, except on China, global financial markets have been rocked by this uncertainty.

 

Economists argue that Trump’s actions have undermined investor confidence in US assets, casting doubt on the dollar and US Treasuries as reliable safe havens. In contrast, the ruble has remained relatively immune to the effects of the tariff war, as Russia has largely been exempt from the new tariffs.