Ruble reaches two-year high against dollar

(MENAFN) The Russian ruble climbed to its highest level in two years against the US dollar on Thursday, driven by robust trade flows and supportive government policies, analysts reported. The ruble fell below 75 to the dollar, its strongest position since 2023, and also gained over 5% against the euro, trading at 86.5.

This rise extends a two-month upward trend for the ruble, supported in part by optimism surrounding Ukraine peace negotiations. Although two rounds of direct talks between Moscow and Kiev took place in Istanbul in May and June, a third round has yet to be scheduled.

Analysts point to both structural and seasonal factors bolstering the ruble’s performance. Mikhail Zeltser of BCS World of Investments told RBK that strong exports and abundant foreign currency supply, coupled with weak imports and low demand, are key drivers. He also highlighted the importance of funding rates for debt refinancing and foreign trade.

Government measures continue to play a significant role. Exporters are required to repatriate earnings for another year, and the Central Bank has increased the summer limits on hard currency sales under its budget rule. Meanwhile, the US dollar is under global pressure, hovering near a three-year low due to ongoing trade tensions.

Denis Popov of PSB noted that the ruble’s rise has persisted despite escalating geopolitical risks, citing recent shifts in US foreign policy rhetoric under President Donald Trump. However, he added that investors appear unfazed by these risks.

Increased foreign currency sales by large exporters may also be contributing, as some companies avoid using rubles for dividend payouts.

Igor Sokolov of Alor Broker dismissed rumors of technical glitches behind the ruble’s rally, attributing the trend to broader macroeconomic forces. He suggested the ruble could strengthen further, potentially approaching 70 to the dollar, though he cautioned that this would take time.

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