The Russian ruble has shown significant strength in recent weeks, reaching a six-month high and potentially rising to 80 rubles per dollar in March, according to analysts. This marks a notable shift from earlier concerns about the ruble weakening to 100 rubles per dollar. The currency’s recent gains are attributed to a positive geopolitical news background, including optimism about improved relations with the United States, the potential restoration of international trade, and the return of foreign capital to Russia. However, this strengthening is fragile and could reverse if geopolitical tensions escalate or positive developments stall.

The ruble’s current strength is driven by reduced geopolitical risk premiums and expectations of easing sanctions, which have encouraged investors to shift from foreign currency to ruble assets. Exporters are also selling foreign currency now, fearing further depreciation. Analysts predict the ruble could trade between 82 and 92 rubles per dollar in March, with potential for further strengthening to 80-85 rubles if geopolitical progress continues. However, a lack of progress or renewed tensions could push the exchange rate back to 90-100 rubles per dollar.

A stronger ruble benefits importers and consumers by making foreign goods cheaper and could lead to lower inflation and earlier reductions in the key interest rate. However, it poses challenges for the budget and exporters, as it reduces revenue from foreign trade. The current exchange rate is considered overstrengthened, with the 2025 budget projecting an average rate of 96.5 rubles per dollar. While financial authorities are unlikely to intervene directly, they may adjust policies, such as reducing requirements for exporters to sell foreign currency earnings.

For individuals, the current exchange rate offers an opportunity to buy foreign currency for long-term goals, such as travel or investments, given the ruble’s likely long-term weakening due to inflation differentials.