Unfavorable payment equilibrium not leaning towards the rouble
In the turbulent economic landscape of 2025, Russia experienced a surprising turn of events. While the country's trade surplus in goods declined significantly from 2024 to 2025, the Russian ruble strengthened against the US dollar.
The 2022 price surge pushed the figure up to $590 billion, but the ruble's performance in 2025 was unexpected. In May, the ruble strengthened to 79 rubles/$—a 3% increase from April. This strengthening trend continued throughout Q2 2025, with the ruble appreciating 6.6% against the US dollar from April to June. By mid-2025, the ruble had almost regained pre-war levels, despite inflation exceeding 35% during this time.
The paradox of a strengthening ruble amid a low and stable current account can be attributed to high domestic interest rates, currency controls, and restructured trade partnerships. Experts suggest that the high interest rates in Russia made ruble-denominated deposits attractive, leading exporters to convert foreign currency into rubles to benefit from high deposit returns. This, in turn, contributed to the currency’s appreciation.
The government's imposition of capital and currency controls to manage outflows has also helped stabilise the ruble's value amid ongoing sanctions. Furthermore, Russia’s pivot toward trade and financial ties with China, Turkey, Central Asia, and the Gulf via parallel import schemes has restored access to essential goods and partly insulated the ruble from Western sanctions-related volatility.
Despite some month-on-month increases in 2025, the overall trend compared to 2024 is downward. In the first half of 2025, the trade surplus was $57.3 billion, down about 19.2% from $70.9 billion in the same period of 2024. The trade surplus for June 2025 was $9.3 billion, 21.4% lower year-on-year compared to $11.8 billion in June 2024.
The Central Bank of the Russian Federation (CMASF) predicts a gradual softening of the ruble to around 100 RUB/$ by the second half of 2025 as imports normalise and net currency sales decline. However, analysts caution that if imports accelerate, the ruble will adjust to less favourable trading conditions.
External trade remains heavily influenced by commodity market conditions, and the share of non-commodity goods in total exports did not increase between 2020 and 2024. Annual exports averaged $380-400 billion between 2014 and 2019, dropping to $330 billion in 2020.
Imports, which were set back by mid-2010s sanctions to $230-240 billion per year, have recovered to $280-290 billion, driven by both consumer and investment goods. The CPI commodity index notably deteriorated in April due to the U.S.'s increase in tariffs on Chinese imports to 145% and China's retaliatory tariffs of 125% on U.S. goods.
Since 2022, the ruble's volatility has been higher than that of comparable exporting countries like Brazil and South Africa. The current account balance surplus for the first half of 2025 fell to $23.3 billion from $37.4 billion in the previous year. The Year-to-date trade surplus in goods for 2025 stands at $47.9 billion, compared to $59.1 billion in the same period of 2024.
The deviation of the actual ruble rate from the fundamental one can be attributed to the "Kudrin spiral" effect. Delays in repatriating export earnings, sanctions against currency market infrastructure, and reduced liquidity are contributing factors to the ruble's volatility. If price conditions remain unchanged and imports accelerate, the CMASF believes the ruble will adjust to less favourable trading conditions.
The strengthening trend of the Russian ruble in 2025, despite a declining trade surplus in goods, is unexpectedly occurring due to high domestic interest rates, currency controls, and restructured trade partnerships, making ruble-denominated deposits attractive for exporters.
Experts suggest that this appreciation of the ruble is also attributed to the government's imposition of capital and currency controls to manage outflows and Russia’s pivot toward trade and financial ties with countries like China, Turkey, Central Asia, and the Gulf via parallel import schemes, partly insulating the ruble from Western sanctions-related volatility.
