19.08.202509:57:04UTC+00Russian Ruble Holds Below 2-Year High

The Russian ruble has maintained a position around 80 per USD since early August, a slight dip following its surge to a two-year high of 76.8 in July. This fluctuation is linked to expectations of reduced interest rates by the Central Bank of Russia (CBR). The central bank is predicted to continue its cycle of rate cuts from the existing rate of 18%, spurred on by inflation reaching a nine-month low at 8.8%. Despite these shifts, the ruble has shown a 40% increase since the start of the year, bolstered by stringent capital controls enforced by the Kremlin. Under Moscow's directives, companies are mandated to sell 40% of their export income, though recent Kremlin statements suggest firms are offloading up to 70% of their earnings. Concurrently, the sluggish Russian economy has led to a decline in domestic business activities related to importing goods and services. From a geopolitical standpoint, potential developments toward a ceasefire or resolution of Russia's invasion of Ukraine have bolstered Russian assets. This sentiment was fueled by discussions between President Putin and U.S. President Trump about possible terms, alongside the EU's willingness to consider ending the conflict with Ukraine possibly conceding some territory.