MOSCOW (Realist English). The past week has seen a record strengthening of the rouble, an increase in oil‑and‑gas budget revenues and new signals from the Central Bank and the government.
On the one hand, the Russian currency is showing the best performance in the world; on the other hand, experts warn that this is a temporary phenomenon and carries risks for the economy.
Rouble hits three‑year highs
On the over‑the‑counter market on May 20, the dollar fell to 69 roubles, a low not seen since February 2023. The official Central Bank rate for the same day was 71.35 roubles, and on May 21 it was 70.95 roubles. Since the start of the year, the rouble has strengthened by 18%, and Bloomberg has recognised the Russian currency as the best in the world in terms of its performance against the dollar.
However, the situation has already begun to reverse. For the weekend of May 23–25, the Central Bank set the dollar at 71.209 roubles (up 41.88 kopecks from the previous value), the euro at 82.5445 roubles and the yuan at 10.4823 roubles.
What is behind the strengthening?
Experts agree that the rouble is gaining strength due to a combination of temporary factors:
- High oil prices caused by the war in the Middle East and the blockade of the Strait of Hormuz.
- Tight monetary policy by the Central Bank (key rate of 14.5% per annum), which stimulates demand for rouble assets.
- Reduced imports due to sanctions and expensive credit – demand for foreign currency from importers is minimal.
- The peak of tax payments at the end of May: exporters are forced to convert foreign currency earnings into roubles to settle with the budget.
“The rouble still has prospects. If the current situation persists, the exchange rate could well return to 65,” said Alexander Baryshnikov, manager of the Mining fund at Record Capital Management Company.
What does a strong rouble mean for the economy?
Georgy Ostapkovich, Scientific Director of the Centre for Business Tendencies Studies at the Higher School of Economics, warned of a dual effect:
“Aeroplanes will fly, people will go to restaurants. But this is not the best option. Our export companies will lose out – they receive revenue in foreign currency but incur expenses in roubles. The stronger the rouble, the less they earn.”
A strong rouble also hurts the budget. In the first quarter of 2026, against the background of the record currency strengthening, oil‑and‑gas revenues fell – despite high world prices.
Oil revenues: 700 billion roubles in May
The rise in world energy prices has brought tangible dividends to the Russian budget. According to Reuters, Russia’s oil‑and‑gas revenues in May increased by 39% compared with the same period last year, reaching 700 billion roubles.
“The budget will receive about 200 billion roubles from the increase in world oil prices,” Finance Minister Anton Siluanov said in an interview with journalist Pavel Zarubin on May 3.
However, he acknowledged that inflows and outflows of revenues over the last two months have been at the same level and will eventually balance each other out.
Central Bank: 14.5% – and cheap credit will not return
The key rate remains at 14.5% per annum, set by the Board of Directors on April 24. At the same time, the Central Bank stated in a summary published on May 11 that the forecast for the average key rate for 2026–2027 needs to be raised.
“If your business plan was built on the hope that by autumn you will be able to refinance your debts at a comfortable 10‑12% – rewrite the plan. The era of expensive money is prolonging,” the regulator sums up.
At the same time, for the first time at such a high level, the Bank of Russia introduced the concept of a risk of “excessive cooling” of the economy due to the continued high rate.
Budget policy: deficit and oil
In the first quarter of 2026, according to preliminary data, the federal budget was in deficit by 4.576 trillion roubles (1.9% of GDP). This exceeds the full‑year deficit planned at 3.786 trillion roubles (1.6% of GDP).
Record spending in the first quarter has raised concerns at the Central Bank. In the summary of the key rate discussion, the regulator noted:
“The trend in spending may signal a larger budget impulse for the year as a whole than has been factored in. This increases the likelihood that fiscal policy in 2026 may not deliver the expected disinflationary effect.”
Finance Minister Anton Siluanov denied rumours of new tax changes:
“These are fake leaks; such proposals are not being considered. The main changes to the tax system have already been adopted,” he told RIA Novosti on May 13.
Tax reform: increase in VAT payers
The tax reform is already producing results. Since January 1, the threshold for compulsory VAT for companies using the simplified taxation system has been lowered from 60 million to 20 million roubles. In the first quarter of 2026, the number of VAT payers increased by 320,000.
“One in every fourteen companies on the simplified tax system is now issuing invoices, keeping a sales ledger and filing quarterly returns,” an analytical summary notes.
However, despite the increase in the VAT rate, revenues have grown only slightly – only 20% since the start of the year. The budget could lose more than 1 trillion roubles, and pressure on business will intensify.
De‑dollarisation: the process is irreversible
Deputy Foreign Minister Alexander Pankin stated in an interview with RIA Novosti on May 20:
“The process of de‑dollarisation in the world has become irreversible. The role of the American currency, while still significant, is steadily declining.”
Finance Minister Anton Siluanov gave specific figures: settlements between Russia and China in national currencies have reached 99.1% (in roubles and yuan).
Outlook: what next
Experts agree that the situation will change by summer.
“Most experts agree that everything will change in the summer. Analysts expect a range of 75‑80 by the end of the year, and in the longer term – 85,” the Prime news agency forecasts.
Reasons: the Central Bank will continue to ease monetary policy, which will make rouble instruments less attractive and increase demand for foreign currency. The Finance Ministry will increase its purchases of dollars and euros under the budget rule.
