23.10.202511:25:58UTC+00Russian Ruble Holds Despite Sanctions

The Russian ruble stood at 81.3 per USD, maintaining its stability since achieving two-year peaks in the second quarter. This steadiness results from stringent capital controls and elevated interest rates, which have counterbalanced the repercussions of newly imposed sanctions and a bleak forecast for Russia's economic growth. The United States implemented sanctions on Lukoil and Rosneft, affecting the prospects for energy exports to India, a key consumer of Russian oil following the 2022 Ukraine invasion. Furthermore, the European Union has declared its intention to cease the purchase of Russian LNG by 2027. Despite these developments, the ruble's value remained largely unaffected due to Kremlin directives requiring export-driven companies to convert 40% of their foreign exchange earnings into rubles. Moreover, the Bank of Russia enacted a smaller-than-anticipated interest rate reduction and indicated its commitment to managing inflationary threats, even amidst growing concerns about economic growth. The continued effects of Western sanctions, government expenditure prioritized for the conflict in Ukraine, and high borrowing costs have led the International Monetary Fund to predict a mere 0.6% GDP growth for Russia this year.