The Russian Ruble hits highest level since August on US-Russia rapprochement

The Russian ruble hit its highest levels against the US dollar and the Euro since August 2024 on Thursday, a direct result of the accelerating rapprochement between Washington and Moscow that has raised hopes on the Russian side for the lifting of US sanctions.

The Russian currency has continued to rise since mid-February, following a call between US President Donald Trump and his Russian counterpart Vladimir Putin on the 12th of this month, after suffering weakness and fluctuations, especially due to the impact of harsh Western sanctions over the past three years.

The Russian Central Bank set the exchange rate on Friday at 88.51 rubles to the dollar and 92.48 rubles to the Euro.

The exchange rate isn’t fixed in Russia, but the index issued by the Russian Central Bank reflects market activity.

Observers believe that Russian markets expect good news regarding economic relations between Moscow and Washington, in light of bleak expectations for growth in Russia in 2025, and the country incurring heavy costs due to the conflict in Ukraine.

Following a meeting between US Secretary of State Marco Rubio and his Russian counterpart Sergei Lavrov on Tuesday in Riyadh, Washington confirmed that the meeting had provided the foundations for historic economic and investment opportunities that would result from ending the war in Ukraine.

The Russian currency’s recovery comes after it fell in late November 2024 to its lowest levels since March 2022 against the dollar and the Euro, against the backdrop of escalating tensions between Russia and Western countries over Ukraine and new US sanctions imposed by the administration of former US President Joe Biden.

The sanctions particularly targeted the Russian oil sector, a major source of revenue for Moscow to finance its attack on Ukraine.

Before the war began in early 2022, one US dollar was worth between 75-80 rubles.

During the war years, the Russian economy became largely dependent on military orders, and was affected by Western sanctions despite circumventing them and continuing to import some goods.

Experts believe that this situation is problematic for Russia in the long term, and that lifting US sanctions targeting Russian banks or oil companies may allow it to strengthen its capabilities again.