Capital Controls Maintain Ruble Strength

2025-10-24 10:54 By Andre Joaquim 1 min. read

The Russian ruble was at 81.2 per USD, remaining stable since reaching two-year highs in the second quarter as strict capital controls and high interest rates offset the impact of fresh sanctions and a grim outlook on Russian growth.

The US sanctioned Lukoil and Rosneft, pressuring the outlook of energy exports to India, which have been among the main consumers of Russian oil since the invasion of Ukraine in 2022.

Also, the EU announced it would shun Russian LNG on 2027.

Still, the impact on the currency was muted as the Kremlin's mandates export-oriented companies to sell 40% of their foreign exchange revenue.

Also, the Bank of Russia said it will keep policy restrictive until the end of next year to curb inflationary pressures, limiting the impact of its unexpected 50bps cut.

The prolonged effect of Western sanctions, government spending that prioritizes the war against Ukraine, and high borrowing costs drove the IMF to forecast that Russia's GDP will only grow 0.6% this year.



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