Ruble Rises as Preferred Currency in Russian Exports Amid Sanctions Pressure

According to new data released by the Central Bank, the Russian ruble has for the first time since the imposition of extensive Western sanctions following the invasion of Ukraine emerged as the primary currency used for export payments in the country.

In April, the ruble comprised 52.3% of export transactions, while the proportion of currencies from nations labeled as «unfriendly» by the Kremlin—including the United States and other Western allies—plummeted to an unprecedented low of 14.1%.

The ruble’s involvement in import payments has consistently remained above 50% since December 2024, reaching a peak of 56.2% in April.

Russian officials, including President Vladimir Putin, have celebrated the nation’s initiatives to reduce dependence on the dollar and shield trade from Western influences.

However, the surge in transactions conducted in rubles is actually fueled not by global confidence in the Russian currency, but by the development of obscure payment systems that are costing Russian businesses billions and complicating the economic landscape further.

A report by Dmitry Nekrasov, the head of the CASE Analytical Center, indicates that Russia has established an alternative international payment framework composed of two parallel systems: domestic ruble transfers managed by Russian banks and foreign currency transactions, primarily in Chinese yuan, conducted by foreign financial institutions. Whenever possible, these systems are interconnected, enabling rubles from Russian importers to finance Russian exports.

Nevertheless, this framework encounters inherent limitations. Russia continues to experience a substantial trade surplus—amounting to $39.5 billion in the first four months of 2025, according to the Central Bank—yet a significant portion of the revenue from exports remains abroad.

With the inflows and outflows frequently not aligning, Russian companies have increasingly depended on prior foreign currency reserves or have had to covertly exchange currencies to bridge the gap.

Nekrasov estimates that Russia’s offshore assets, excluding official reserves, now surpass $200 billion and are on the rise.

The Central Bank reported a $20.6 billion increase in foreign assets during the first four months of 2025, mostly categorized as “other investments.”

The bank noted that this increase is partly attributed to prolonged delays in settling export payments, which effectively keep the money outside the reach of Western regulators.

As a result, there has been a notable contraction in Russia’s domestic foreign exchange market, with demand for foreign currency in May hitting its lowest point since the Moscow Exchange halted trading in dollars and euros.

Meanwhile, major Russian exporters reported selling just $7.3 billion in foreign currency earnings that month, the lowest figure since mid-2023, despite adhering to government mandates that require them to convert nearly all of their export revenues.

This pattern has contributed to the strengthening of the ruble, which has appreciated steadily for six consecutive months.