FX.co ★ Russian Ruble Slides from 2-Year High

The Russian ruble depreciated to 81 per USD after reaching a two-year high of 76.8 earlier in July. This decline was influenced by threats of tariffs from the United States, which negatively impacted expectations for Russian foreign exchange flows. President Trump announced plans to expedite the deadline for a truce between Russia and Ukraine and to impose stringent tariffs on countries re-exporting Russian products, particularly energy and metals. This increased pressure on the ruble, especially after the Bank of Russia implemented a 200 basis point cut in its base interest rate. Nevertheless, the ruble has remained 40% stronger since the beginning of the year, attributed to capital control measures enforced by the Kremlin. In line with a new mandate from Moscow, companies are required to sell 40% of their foreign currency earnings until April 2026, despite reports that firms are currently selling 70% of their earnings. Concurrently, the deceleration of the Russian economy and ongoing Western sanctions have hindered domestic businesses from importing goods and services, thereby exerting pressure on domestic demand for foreign currency.