Charted: The Decline of the Russian Ruble

Charted: The Decline of the Russian Ruble

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The Russian ruble has declined sharply against the U.S. dollar following a new wave of sanctions targeting more than 50 financial institutions.

Notably, the sanctions focused on Gazprombank, a critical entity for financing military equipment purchases and paying Russian soldiers in the war against Ukraine. Until now, it had been the only major institution exempt from sanctions, enabling European companies to pay for Russian fuel imports.

This graphic shows the value of the Russian ruble against the U.S. dollar since 2000, based on data from TradingView.

The Ruble to U.S. Dollar Exchange Rate Since 2000

So far this year, the ruble has plunged 21% against the dollar as of November 27, making it one of the worst-performing currencies among emerging markets.

This led one U.S. dollar to buy 110 Russian rubles as the currency plummeted. In response, the Russian central bank suspended foreign purchases of the ruble for the remainder of 2024 in an effort to stabilize the currency as it fell to its lowest level since 2022 following the invasion of Ukraine.

For perspective, the ruble to dollar exchange rate was more than four times higher in 2000 than it is today.

The falling ruble is fueling inflation concerns in an already overheated Russian economy, where interest rates stand at a steep 21%. This currency depreciation also raises the cost of funding the war, as imports become more expensive. Compounding the financial strain, the Russian government plans to increase defense spending by 25% next year, bringing it to an estimated $120 billion.

Now over 1,000 days into the war, Russia is scaling up its war tactics. The invasion is bolstered by Iranian weapons and North Korean soldiers, reflecting Russia’s expanding alliances. In addition, Russia test-launched a hypersonic Oreshnik missile in response to a Ukrainian attack using U.S.-made weapons.

However, the future of the conflict remains uncertain, especially with the incoming U.S. Republican administration. President-elect Donald Trump has stated his intention to bring the war to a swift conclusion, leading both sides to ramp up military activity and territorial gains before he returns to office.

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To learn more about this topic from a global perspective, check out this graphic on U.S. dollar performance compared to other major currencies.