The Russian ruble has reached a two-year high against the US dollar, driven by renewed hopes for a peaceful resolution to the Ukraine conflict and easing geopolitical tensions. On Thursday, the ruble surged to 78.9 against the dollar, its strongest level since mid-May 2023, marking an 11% gain since early March. This significant rally has been fueled by optimism over a potential peace deal, with analysts citing the Russian currency’s impressive performance as a testament to the market’s confidence in a possible normalization of ties between Russia and the US.
According to Alina Poptsova, an equity analyst at Alfa-Capital, the ruble has posted the strongest performance among emerging market currencies since the start of 2025. Natalia Pyrieva, chief analyst at Tsifra Broker, notes that the market is being driven by emotions linked to signs of a potential dialogue with Ukraine on a political settlement. The rally has also been supported by higher sales of foreign currency earnings by exporters ahead of tax and dividend payments, as well as falling demand from importers.
Market participants are betting on the return of foreign companies to the Russian market and a possible easing of sanctions, which has led to increased investor confidence. Yuri Kravchenko, head of banking and money market research at Veles Capital, believes that investors are pricing in not just progress on diplomacy but also a potential rollback of infrastructure-related sanctions, a return of foreign capital, and improved FX liquidity. He cites “favorable geopolitical expectations” as the ruble’s key support in recent weeks.
Some experts predict that the ruble could reach 75 to the dollar this month if geopolitical momentum continues, although they caution that the rally may be short-lived unless concrete developments follow. The latest rounds of sanctions announced by the EU and the UK are unlikely to have a strong impact on the Russian currency, according to analysts.
The recent diplomatic efforts between Moscow and Washington have contributed to the ruble’s surge. US President Donald Trump and Russian President Vladimir Putin held a productive two-and-a-half-hour phone call on Monday, discussing a potential reset in Russia-US bilateral ties. Last week, delegations from Russia and Ukraine met in Istanbul for their first direct talks since Kiev unilaterally withdrew from the peace process in 2022. The two sides agreed to conduct a prisoner exchange involving 1,000 POWs each and to continue contacts once both had prepared detailed ceasefire proposals.
As the situation continues to unfold, the Russian ruble’s performance will likely remain closely tied to the progress of diplomatic efforts and the potential for a peaceful resolution to the Ukraine conflict. With the market watching closely, any further developments are likely to have a significant impact on the currency’s value.
