Russian ruble strengthens on news of Black Sea ceasefire agreement

The Russian ruble edged up to around 84.2 per USD as traders assessed ongoing ceasefire negotiations between Russia, the US, and Ukraine.

Russian ruble strengthens on news of Black Sea ceasefire agreement

Market sentiment remained cautiously optimistic after the US brokered separate agreements with Ukraine and Russia to pause attacks in the Black Sea and on energy infrastructure. However, key details, including the official start date and enforcement mechanisms, remain unclear. As part of the negotiations, Washington pledged to facilitate the lifting of international sanctions on Russian agricultural and fertilizer exports, aiming to ease global food supply concerns. The Kremlin acknowledged the agreement but stressed that its implementation depends on the removal of sanctions targeting Russian banks and companies involved in agricultural trade. Despite the uncertainty, investors viewed the talks as a potential step toward de-escalation, lending some support to the ruble.

Ruble up by 25% year-to-date

So far in 2025, the ruble has appreciated approximately 25% against the USD, briefly reaching a June 2023 high of 81.7 in February. The currency’s strength has been underpinned by hopes of easing geopolitical tensions, alongside continued support from high domestic interest rates. In March, the Central Bank of Russia kept its key policy rate at 21% as widely expected but struck a more optimistic tone on disinflation, signaling a possible shift toward monetary easing later in the year. Additionally, strong foreign exchange inflows from commodity exports and capital controls imposed by Russian authorities have helped stabilize the ruble. However, uncertainty surrounding the ceasefire's durability, Western sanctions, and broader geopolitical developments could introduce volatility in the coming months. Markets will closely monitor further diplomatic engagements and any shifts in Russia’s economic policy stance.