A ruble rebound Trump’s tariffs have wiped out all post-election U.S. stock market gains — but for Russia’s economy, his return has been a boon
It’s been six weeks since Donald Trump returned to the White House, and from the start, his comeback was widely seen as good news for the Russian financial market. For Russian investors, the new U.S. president brought hopes of ending the war in Ukraine and easing sanctions. Trump’s first official call with Vladimir Putin, along with talks between Russian and American delegations in Saudi Arabia, sparked a stock market surge and sent the dollar to a six-month low against the ruble. Meduza explores how Trump’s rhetoric is shaping investor sentiment in Russia — and whether their optimism might be misplaced.
The dollar’s value has fallen below 86 rubles for the first time in six months. What’s going on?
In January, the dollar was trading at 102 rubles, and most market participants expected the ruble to weaken by about 10 percent in 2025. Sberbank CEO Herman Gref personally predicted the U.S. currency would reach around 115 rubles. Those expectations darkened when the outgoing Biden administration imposed sanctions on Russia’s entire energy sector, threatening to reduce export volumes and, in turn, foreign currency inflows. Against this backdrop, the Russian Economic Development Ministry’s of 96.5 rubles as the average annual U.S. dollar exchange rate seemed overly optimistic.
Still, the beginning of the year is always a favorable season for the ruble. Anticipating a weakening of the national currency, importers stocked up on goods in advance, which drove down demand for foreign currency. Another factor came into play in February: due to the Chinese New Year, businesses in China were closed for several weeks, making it impossible to process shipments during that time. The dollar slipped to 97 rubles, and economists expected the trend to reverse any day.
Instead, the opposite happened. On February 12, Vladimir Putin and Donald Trump held their first official phone call. While no substantial details were disclosed, both sides described the discussion as having gone “well.” For the currency market, that was enough to push the exchange rate below 90 rubles per dollar. Analysts at Sovcombank noted a “significant shift in the external environment,” saying that “dialogue has begun” and “positions appear to be converging.”
The ruble’s next surge also came thanks to Trump. A meeting between Russian and American delegations in Riyadh was officially described as focused on “restoring the full spectrum of Russian-American relations.” No formal agreements were announced, but no fundamental disagreements emerged either. The dollar quickly fell to 86 rubles.
Overall, the ruble has strengthened by 15 percent since the start of the year, making it the best-performing currency among emerging markets, according to Bloomberg. Long-term forecasts have also begun to shift: Sber revised its year-end dollar estimate from 115 to 105 rubles, VTB now expects the rate to stay below 103 rubles, and the Economic Development Ministry gave up its spot as the most optimistic forecaster to PSB Bank, which projected the dollar falling below 99 rubles. Meanwhile, Economic Development Minister Maxim Reshetnikov acknowledged that the exchange rate was “stronger than projected” — a statement traditionally interpreted by the market as a sign of government concern that a strong ruble would reduce revenue from energy exports.
So far, though, this verbal intervention hasn’t had much effect. Some market participants now believe the dollar could fall to 75 rubles — its level before Russia’s invasion of Ukraine in February 2022. Economists point to signals from Washington: the U.S. is reportedly planning to revise its strategy toward Russia, prepare a sanctions relief plan, and end military aid to Kyiv.
There are some skeptics, but they’re in the minority. The Russian Central Bank has warned that the ruble’s rise is driven by “speculative euphoria.” When looking at fundamental factors — like export and import volumes — the situation is actually deteriorating. The U.S. trade war with key partners has driven down oil prices, and Russia’s Urals crude is trading at $55 a barrel — below the government’s projections. The Finance Ministry has already started talking about a potential increase in the budget deficit.
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What about Russian stock prices?
The Russian stock market has reacted even more strongly to the “Trump factor.” In just two months, the Moscow Exchange index has jumped 40 percent.
The brokerage firm Tsifra Broker argues that investors are driven by expectations that Trump will ease or lift sanctions. This would allow exporters to sell more goods and boost profits while attracting foreign investors with significant capital back to the market. However, Tsifra Broker analyst Natalia Pyrieva cautions that “no specific agreements have been reached,” adding, “We shouldn’t expect to wake up tomorrow in a new reality where the world returns to its 2014 state.” Even so, Tsifra Broker forecasts that the Moscow Exchange index could rise by almost another 50 percent, reaching 5,000 points by year-end (up from its current level of 3,265 points).
The market has even begun speculating about a full restoration of Russia’s access to the SWIFT payment system after State Duma deputy Anatoly Aksakov suggested the country “could rejoin [the global SWIFT infrastructure], as our systems are all set up.” That same day, shares of Russian banks surged by almost 10 percent, including VTB — despite the fact that just a month earlier, the bank’s CEO, Andrey Kostin, had called for “killing SWIFT.”
The real driver of the market, however, has been Gazprom. The potential lifting of sanctions would allow the gas giant to return to the European market. Although no official reports have confirmed this scenario, Gazprom’s shares still jumped 22 percent in just two days — fueled by rumors in the press about talks on reviving the Nord Stream pipeline project.
Representatives of the investment firm Renaissance Capital described the growth as “bordering on the irrational,” noting that even heavily indebted companies like Segezha Group, long considered one of the market’s weakest performers due to high interest rates, have seen their shares climb.
Meanwhile, investors continue to react to every piece of news:
- A dispute over the deployment of peacekeeping forces in Ukraine was seen as the first sign of disagreement between Moscow and Washington, triggering a sell-off
- When the Russian Foreign Ministry proposed restoring air travel, Aeroflot’s shares jumped, despite there being no response from Washington
- After last week’s heated exchange between Volodymyr Zelensky and Donald Trump in the Oval Office dashed hopes for a swift peace agreement, the market fell
- When the Ukrainian president wrote that it was “time to make things right” with the United States, the market rose again
Will this economic growth have any tangible effects for Russians?
At the moment, it doesn’t look like it.
In theory, a stronger ruble could make imported goods cheaper — but that’s not happening in practice. Companies hedge against currency risks and use their own internal exchange rate of 110 rubles per dollar when settling accounts with customers. Exporters, on the other hand, earn less because they sell foreign currency at market rates.
At the very least, a strong ruble won’t drive inflation higher — though annual inflation still remains above 10 percent. Despite this, the Central Bank isn’t feeling optimistic: it’s lowering its forecast and says it sees no signs of a sustained slowdown in price growth. Officially, the regulator’s forecast leaves room for inflation to rise as high as 22 percent, though most economists don’t consider that likely.
There’s debate over when interest rates might start coming down. Optimists in the State Duma expect cuts in the second quarter, VTB head Andrey Kostin is aiming for the second half of the year, while his deputy Dmitry Pyanov doesn’t anticipate easing until 2026.
The situation could change if the unexpected rapprochement between Moscow and Washington actually leads to a softening or lifting of sanctions. But even economists close to the government aren’t counting on that just yet. When journalists asked Sberbank CEO Herman Gref about the prospect of sanctions being eased, his response was blunt:
We’re working on the assumption that no sanctions will be lifted. In fact, we expect them to get even tougher.
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