From Sanctions to Strength: Russia’s Ruble Surges Amid U.S. Trade Turmoil

Aamna Zaheer

In a remarkable economic development, Russia’s Ruble strengthens and outperforms the dollar and gold, and becomes the world’s top-performing currency, amid turmoil in global markets. This achievement is particularly striking given the backdrop of ongoing U.S. sanctions and trade disruptions, including new U.S. tariff policies introduced in 2025. The Ruble’s resilience highlights Russia’s strategic economic manoeuvres and the influence of global geopolitical shifts. As the USA’s tariffs rattle the world, is Russia gaining the upper hand? 

The Ruble has gained 38% against the US dollar, outperforming even gold.

Russia is an outlier in the global trade war. Unlike other major economies, Donald Trump has not been targeting Russia with his tariff policies, a move that economists suggest may have given an advantage to the Russian economy. According to Reuters, the Russian currency is accelerating contrary to all predictions and has become the best-performing currency in the world. It has surged past every major competitor, including gold. The Russian currency is doing better than gold, which is the go-to haven during tough times, but today the ruble is doing better than gold. This year it has gained 38% against the US dollar; on the other hand, the dollar is struggling. Trump’s tariff policies have triggered a major crisis of confidence in the greenback by global players, but that’s not the only reason why the ruble is shining. 

Overall, Moscow’s economic strategy is demonstrating success; four factors are behind the ruble’s success. First, a political thaw between Putin and Trump has eased fears about the future of the Russian economy. New U.S. tariff policies, referred to as “Liberation Day” tariffs, have unsettled global markets, weakening confidence in the U.S. dollar, and have elevated a sense of security towards Russian assets. Second tight monetary controls, Russia has curbed the demand for foreign goods, which led to reduced imports, and it has left more foreign currency in Russian coffers. The Russian Central Bank’s decision to raise the key interest rate to 21% has been a cornerstone of the Ruble’s strength. The third reason for government intervention, Kremlin is using its national wealth fund it has been sell foreign currencies like the US dollar and the British pound, and this helps support the ruble. It stimulates the kind of surge that we are now witnessing. Fourth is Russia’s trade surplus, according to TASS news agency, which is boosted to $18.5 billion in the first two months of 2025, a 15% increase from the previous year, and has significantly bolstered the Ruble. A 5% decline in imports, coupled with a 25% increase in foreign currency sales by exporters converting earnings to Rubles, has ensured a steady inflow of foreign currency as reported by Intelli news. Energy exports, despite sanctions, remain a key driver, with Russia rerouting trade to non-sanctioning countries, as mentioned in the report of AP News. The Russian government is convinced about its economic forecast, but at the same time, the Kremlin admits that there are challenges in the future.

Russia’s trade surplus hit $18.5 billion in early 2025, bolstering currency strength.

According to the Kremlin’s spokesperson, right now, Russian economy is developing quite successfully it is stable and has a high margin of stability however additional efforts will be required given the turbulence we are currently experiencing in the global economy.

So, what are these challenges? One of them is the price of oil. Earlier this month, oil prices dropped, and one barrel of Russia’s euro crude was trading at almost $50. That’s the bottomed-out price level over the past two years, $50 for a barrel, and the economic forecast is deteriorating. For instance, the oil demand is expected to decline; the International Energy Agency and the oil cartel OPEC have both reduced projections, as mentioned in the report of AP news. According to the reports of IEA and OPEC, trade tensions are hitting global demand, and when the demand for energy decreases, the Russian market makes less money. This could signal weak Russian economic indicators because it depends heavily on energy revenues. Last year, Russia earned more than $100 billion from oil and gas sales. If the price drops, then demand falls, Moscow will earn less, and it will have less money to spend. The Russian Central Bank has issued a warning that if the USA continues to escalate the trade war with major powers, global trade will cool off, so will the demand for Russian oil and gas, and this could weaken the Russian economy. 

The second challenge is the Russian economic slump. The Russian market faces a labour shortage, which in turn drives up wages. The number of young workers is shrinking, and many of them have been recruited into the military. So, there are fewer people to take up other jobs, and this impacts the economy directly because fewer workers mean higher labour costs for businesses. The third issue is rising inflation. Currently, Russia struggles with more than 10% inflation, which is well beyond the Russian central bank’s acceptable level. To fight inflation, they hiked interest rates to 21%. So, there’s a fair bit of pressure on numerous fronts. 

According to the Russian central bank’s governor, Russia will approach this carefully, cautiously, including remembering that last year, after a slowdown at the beginning of the year, inflation raised, its head again, and the Kremlin need to make sure that the current slowdown in the rate of price growth is sustainable. Another factor is the tectonic changes in global trade, which are unfolding before their eyes, and it is still very difficult to judge where they will lead both the global economy and how they will affect Russia. As reported by MSN News, this is a new significant risk that the Russian government must consider.

Despite over 20,000 sanctions, Russia’s economic recalibration showcases long-term resilience.

Does that mean that Russia is in trouble? Well, far from it, the country faces significant sanctions since the Ukraine war, accordingly, the West has imposed more than 20,000 sanctions in a bid to isolate Russia, but Moscow has managed to adapt to them. Russia found ways to bypass restrictions, it took advantage of the slow, uneven sanctions enforcement by using its vast natural resources. All these approaches provided the Russian economy moment for recalibration, and the product was long-term resilience, even as pressures mount, Russia’s economy persists in the fight. The ruble is holding strong as the world comes face-to-face with Trump’s trade war, while the Russian economy is in favourable conditions.

The author is an undergraduate student and research intern. Her expertise lies in analysing how security issues influence foreign policy decision-making.