18.07.202514:16:46UTC+00Russian Ruble Inches Lower from YTD Peak

The Russian ruble recently traded at 78.5 per USD, slightly weaker than the peak of 76.9 reached in May. This shift comes as markets evaluate the impact of new EU sanctions, which may counteract the capital controls sustaining the ruble's exchange rate. The EU has introduced a fresh sanctions package that targets additional Russian banks and shadow tankers involved in transporting Russian energy, while also setting a lower ceiling to purchase Russian oil, capping it at 15% below the market price.

This year, the currency has appreciated by 45%, driven by Kremlin policies that require companies to sell foreign currency, thereby artificially creating demand for rubles. Under the new mandate, companies are obligated to sell 40% of their foreign exchange proceeds up until April 2026. However, the Kremlin reports that firms are already selling 70% of their earnings. Concurrently, the slowing Russian economy, coupled with Western sanctions, restricts domestic enterprises from importing goods and services, consequently diminishing the domestic demand for foreign currency.

Supporting the ruble's value, the Central Bank of Russia (CBR) has maintained interest rates near a record high of 20%.