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Weak rouble, higher oil may help Russia if Trump's tariffs hit, analysts say
Published by Global Banking and Finance Review
Posted on July 30, 2025
3 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on July 30, 2025
3 min readLast updated: January 22, 2026
Russia's economy may find short-term support from a weak rouble and higher oil prices amid Trump's tariff threats, impacting exporters and market sentiment.
By Elena Fabrichnaya
MOSCOW (Reuters) -Russian markets reacted cautiously to U.S. President Donald Trump's threat to impose new sanctions, with analysts saying on Wednesday a weaker rouble and higher oil prices as a result of his measures may support the economy in the short term.
Trump said on Tuesday the United States would start imposing tariffs and other measures on Russia "10 days from today" if Moscow showed no progress toward a peaceful settlement in Ukraine. Oil prices gained more than 3% on his remarks.
The rouble has dropped 4.3% since July 24 to 81.9 to the U.S. dollar on Wednesday. Russia's stock market has fallen by 3.4% since July 24.
A weaker rouble boosts export competitiveness by making Russian goods cheaper globally and increases revenue from oil exports priced in dollars.
"The uncertainty of new U.S. sanctions will continue to weigh on the sentiment of Russian investors," said Alexei Antonov from Alor brokerage.
The rouble has rallied by up to 45% against the dollar this year, thanks to the central bank's tight monetary policy and hopes for easing tensions between Russia and the U.S. after talks held in Saudi Arabia in February.
The rouble's appreciation lowered the revenue of Russian commodity firms from oil and gas majors to metals and fertilizer exporters. Such firms make up about 60% of the stock market, which is off-limits to Western investors because of sanctions.
FUNDAMENTAL SUPPORT
Shares in some exporting companies rose after the rouble started sliding, with oil firm Rosneft, Russia's biggest, gaining over 2% since the start of the week, and nickel producer Nornickel rising by over 5% on July 29.
"Fundamental support for the Russian exporters' stocks is provided by soaring oil prices and a significantly weakened rouble," said BCS brokerage analyst Mikhail Zeltser.
The central bank's decision on July 25 to cut its key interest rate as inflation eased also helped the rouble's fall.
A weaker rouble will support the state budget, the main target of Trump's measures, by increasing the rouble-denominated value of Russia's energy revenue even if that shrinks due to new sanctions.
Energy made up 27% of Russia's state budget revenue in the first half, down from around 30% in 2023 and 2024.
Although some weakening of the rouble to around 90 to the dollar is welcomed by the market, a more significant slide towards 100 and beyond is seen as harmful for the economy.
Some analysts recalled November 2024, when the rouble weakened sharply after the U.S. imposed new sanctions. The rouble lost 11% between November 22 and November 27.
Finam analysts said Russian investors were lining up to buy foreign currency to hedge the risk of falling export revenues in case Trump imposes secondary sanctions on buyers of Russian oil, such as China and India.
"In part, the concerns are not unfounded. It was precisely (former U.S. President Joe) Biden's farewell sanctions package at the end of last year that caused the rouble to plummet," Finam analysts wrote in their research note.
(Writing by Gleb Bryanski; Editing by Bernadette Baum)
The rouble is the currency of Russia, denoted by the symbol ₽. It is used for all transactions within the country and is subject to fluctuations based on economic conditions and market forces.
Foreign exchange, or forex, refers to the global marketplace for trading national currencies against one another. It is crucial for international trade and investment.
Economic growth is an increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Investor sentiment is the overall attitude of investors toward a particular security or financial market. It can influence market trends and investment decisions.
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