1 Ruble – Russian Federation

In 2024, the currency situation in the Russian Federation is defined by a state of managed stability under persistent pressure. The ruble's value is primarily dictated by a complex system of capital controls, mandatory foreign currency revenue sales for exporters, and high central bank interest rates (held at 16% for much of the year to combat inflation). This artificial stability has been engineered to shield the economy from the immediate shocks of extensive Western sanctions, particularly those targeting the financial system and energy exports. However, this stability is underpinned by a fundamental shift in trade flows and a sustained decline in imports, rather than robust economic health or investor confidence.

The underlying pressures are significant and structural. The country's current account surplus has sharply narrowed, primarily due to the effective G7 oil price cap and the costly re-routing of energy exports to alternative markets like India and China, which increases transportation costs and discounts. Simultaneously, military-related imports and "parallel imports" of consumer goods to replace departed Western brands have kept demand for foreign currency high. This creates a constant tug-of-war: export revenues in foreign currency are being squeezed while import needs persist, applying a steady depreciatory force on the ruble that requires continuous administrative measures to contain.

Looking forward, the currency regime remains a critical vulnerability. The stability is costly, relying on draining reserves and stringent controls that deter foreign investment and distort the domestic economy. The central bank faces a difficult balancing act between controlling inflation (fueled by high military spending and labor shortages) and avoiding excessive tightening that could stifle economic activity. Consequently, the ruble's trajectory in 2024 is less a reflection of market sentiment and more a direct barometer of the state's ability to enforce its financial defenses, the efficacy of sanctions evasion, and the long-term fiscal burden of the war in Ukraine.