Russian rouble is best-performing currency due to capital controls and global economic uncertainties

From Yahoo Finance: 2025-04-15 12:24:00

Vladimir Putin’s capital controls have boosted the price of the rouble, making it the best-performing global currency amid Donald Trump’s trade policies. The rouble has strengthened 38% against the dollar this year, outpacing traditional safe havens like gold and silver. The currency faces capital controls preventing foreign firms from moving assets out of Russia.

The rouble’s rise is attributed to record-high interest rates of 21%, efforts to temper inflation, and support Russia’s struggling war economy. Capital controls have shielded Russia from global investors’ retreat from riskier assets, unlike many emerging-market currencies. Despite Western sanctions, the rouble has surged due to fears of a US recession amid Trump’s trade war.

Traders are betting on a decline in the US dollar later this year, with options against the dollar dropping to the lowest level since the pandemic. Morgan Stanley predicts the dollar will continue to plunge against the euro, which has increased by over 9% this year. The pound has also gained nearly 6% against the dollar.

Investors are concerned about the currency’s drop, coinciding with a rise in US Treasury bond yields. Analysts warn of a bad cocktail reminiscent of the UK budget crisis of 2022. Amid economic uncertainties, global currencies are fluctuating, with the euro and pound showing strength against the US dollar.

Read more: Russian rouble crowned world’s best-performing currency as dollar declines