Russian Ruble Strengthens Sharply Against Dollar and Euro After US–Iran Talks Collapse

On Monday, April 13, the euro fell below 89 rubles on the Russian interbank market for the first time since January 26. This is evidenced by data from Finam.

By 12:00 Moscow time, the European currency dropped to 88.94 rubles, marking a decline of 1.13 percent compared to the previous session's close.

Dollar Weakens as Ruble Gains Strength

At the same time, the dollar approached the 76-ruble mark on the interbank market. The U. S. currency traded at 76.09 rubles, down 1.26 percent. At its lowest point, the rate fell to 75.95 rubles.

Analysts attribute the strengthening of the Russian currency in part to the collapse of negotiations between the United States and Iran over resolving the Middle East conflict. Following the breakdown, Washington announced a blockade of the Strait of Hormuz, through which nearly one-third of global oil trade passed last year.

The escalation drove up prices for key oil benchmarks, placing additional pressure on the dollar.

Rising Oil Prices Fuel Currency Shift

After the announcement, oil prices surged sharply. Brent crude rose by 7.27 percent on Monday. The price of North Sea oil for June delivery increased by $6.92, reaching $102.12 per barrel.

WTI crude also climbed significantly. Futures for May delivery rose by $8.16, or 8.45 percent, to $104.73 per barrel.

On the over-the-counter market, the dollar fell even further. Trading began at 76.86 rubles, before dropping to a low of 75.75 rubles. At the time of writing, the rate had slightly recovered to 75.95 rubles, down nearly 1.11 rubles, or 1.44 percent.

Strong Ruble Poses Risks for Russian Economy

Despite the gains, a stronger ruble does not necessarily benefit the Russian economy, noted Andrey Kostin, head of VTB.

According to him, a stronger national currency reduces export revenues and deprives the federal budget of additional income-an especially sensitive issue given the rapidly growing state deficit. He described a range of 90-100 rubles per dollar as more optimal.

Earlier, on Friday, April 10, the Central Bank of Russia once again sharply lowered the official dollar exchange rate. For the period of April 11-13, the official rate stood at 76.97 rubles, compared with 77.84 rubles on April 10.