Russian Ruble Hovers at 3-Month High

The Russian ruble hovered around 81 per US dollar on Friday, reaching its strongest level in nearly three months after the Bank of Russia kept its key interest rate unchanged at 14%, in line with market expectations. The central bank maintained a cautious stance as persistent inflationary pressures and elevated expectations continue to complicate its efforts to bring inflation back to the 4% target. Annual inflation stood at an estimated 6.8% as of October 19, while the bank expects it to reach 7.1–7.6% by year-end. Ukrainian attacks on Russian energy infrastructure have disrupted refinery operations, contributed to fuel shortages and increased transportation costs, adding to price pressures. The central bank also warned that capacity constraints and wage growth exceeding productivity gains pose further inflation risks. Policymakers forecast an average key rate of 12.5–13.5% in 2027 and expect inflation to return to target that year.

The Russian ruble hovered near the 85 per USD mark, not far from the 18-month low of 87 as Russia's fuel crisis hampered foreign exchange flows. Ukraine delivered a wave of strikes against Russian oil assets and refining infrastructure through August. Consequently, Russian petroleum production shrank by 160 thousand barrels per day to 8.718 million bpd in August, the second-sharpest reduction this year. On top of that, attacks on Russia's major refiners cut capacity on production of gasoline and diesel, driving Moscow to ban exports of fuel and swing the Russian economy into an importer of refined product. This triggered an aggressive reversal in goods and capital flows from the Russian financial system, forcing foreign currency outwards and driving the ruble to nosedive from the three-year high of 71 on May 28th to the current 18-month low. In turn, ruble supply rose as the federal government was forced to issue soaring levels of debt to make up for the plunge in energy revenues.

The Russian Ruble touched 87.52 against the USD, the lowest since March 2025. Over the past 4 weeks, US Dollar Russian Ruble gained 6.93%, and in the last 12 months, it increased 6.7%.