The Russian currency has strengthened by 44% against the American dollar
In the first half of the year, the ruble emerged as the world`s strongest performing currency against the US dollar. Since the beginning of the year, it has appreciated by 44.7% against the `American` currency, rightfully claiming the top spot. Trailing significantly behind, though with a large gap, is the Hungarian Forint, which gained 17%, followed by the Swedish Krona, with a 16.5% increase, rounding out the top three. However, not all Russian analysts are pleased with this strong appreciation of the national currency.
Many financiers are convinced that the ruble is excessively overvalued. They are particularly concerned that the dollar, which is rapidly losing value, results in low revenue for the Russian budget from exports when converted into rubles.
Although the head of the Central Bank, Elvira Nabiullina herself, believes that a weak ruble is not something to strive for. «It is a sign of the economy`s vulnerability and the public`s distrust in their own currency,» she stated recently.
Let`s recall the brief chronicle of the ruble`s triumphant march since the beginning of 2025. In January, the dollar was trading at 100.86 rubles, causing widespread concern. Producers and retailers didn`t miss an opportunity to raise prices with every weakening of the national currency. According to analysts, about 30% of imported goods are still present in our consumer basket.
Then, as if by magic, the ruble began to push back against the «American». In February, it was already 92.9, in April 83.3, in June 78.9… As of July 3rd, the dollar is trading at 78.6 rubles. Now economists are concerned for a different reason: they suggest weakening the national currency exchange rate!
Indeed, there are certain conditionalities in the formation of the official ruble exchange rate. After the Moscow Exchange stopped trading «toxic» currencies a year ago, the rate is determined using bank reports and information from over-the-counter digital trading platforms. This leads some to suspect monetary authorities of «manual control» over the ruble rate.
Perhaps there is some truth to this. According to some analysts, there are no objective economic prerequisites for the dollar to repeatedly cheapen while the ruble continuously strengthens. However, financial analyst Sergey Drozdov has a different perspective on this matter.
Is the unrestrained strengthening of the ruble something to be happy about, or, conversely, to worry about?
«You should take advantage of it,» the expert replies.
In what way?
«For example, by buying cash currency at exchange offices at a favorable rate. Cash is sold above the official rate, but still… I agree with the head of the Central Bank: we don`t need a weak exchange rate. It should be acceptable for everyone: both exporters and citizens.»
But a strong ruble is precisely disadvantageous for exporters.
«They are always unhappy about something. A dollar at 200 rubles wouldn`t be enough for them. Remember, 3-4 years ago the `American` cost 80 rubles, and they were fine with that.»
And what is the benefit for citizens from a strong ruble?
«Prices for imported equipment are not rising. I specifically checked. A coffee machine cost 57 thousand rubles in winter, today it`s 42 thousand. Is there a difference? Prices in stores have stopped rising, or rather, they are rising, but not as steeply as before. Strawberries are being sold at kiosks near metro stations for 750 rubles. Apparently, sellers remembered prices from two years ago and are selling at those prices today. Nobody is buying. In a store, you can find strawberries for 250 rubles. Regarding price levels, we have too many `wishes`. But not all of them correspond to reality.»
Is the current ruble exchange rate real in relation to other currencies? Many experts believe it is overestimated, inflated…
«Where did they get that idea? According to the Central Bank`s statements, the rate is fair and reflects the current situation. There are objective economic reasons for the strengthening ruble. Specifically, imports have decreased significantly. And the demand for currency has also fallen; there are no queues at exchange offices.»
This situation has repeated itself three times now. First in 2014, after the events in Crimea. The dollar shot past 70 rubles, then dropped to 51. Next was 2022, during the special military operation. The dollar rose to over 120 rubles, but the key rate was raised, and the rate eventually began to decline. Now the key rate is again 20-21%, the dollar was over 100 rubles, and today it`s 78-79. This is already a trend.
When do you think the ruble will start to fall?
«All my colleagues who previously predicted different timings for the `fall` are now quiet. And that`s right. No one can say. Unfortunately, sooner or later it will happen. But today, I repeat, you should take advantage of the moment.»
