Russian Ruble

The Russian ruble is the national currency of the Russian Federation. The ruble is the second-oldest currency still in circulation, behind the British pound. It is made up of 100 kopeks. The ruble (RUB) has been used since the 13th century and has been through a number of incarnations during that time, including multiple revaluations and devaluations. Before the fall of the Soviet Union in 1992, the currency’s symbol was SUR, and up until the redenomination in 1998, it was RUR. The 1998 redenomination made one new ruble worth 1000 old rubles.

In recent years, the currency’s exchange rate has generally tracked global commodity prices, especially oil prices, because Russia’s economy heavily depends on exports of oil, natural gas, and other natural resources. The ruble collapsed in the second half of 2014, losing about half its value versus the U.S. dollar as global oil prices plunged. Economic and financial sanctions imposed by the U.S. and European Union on Russia in July 2014 over its invasion of Ukraine also helped weaken it.

In late 2017, the National Bank of Ukraine ordered that all Ukrainian banks and other financial institutions were forbidden to circulate Russian banknotes that depict images of Crimea, a region of Ukraine that Russia annexed in 2014. Russia is more than twice as large as the contiguous 48 U.S. states and is blessed with enormous natural resources. Yet Russia’s annual gross domestic product (GDP) ranked only 11th worldwide in 2020, at just about 7 percent the size of the US economy. That’s because Russia relies heavily on exports of natural resources, rather than higher-value-added industries. In fact, in terms of GDP, Russia trails much smaller countries, such as Italy and France.

Ongoing political tensions have hurt the Russian economy, as the country has repeatedly faced sanctions from the international community. The value of the ruble along with many Russian companies plummeted after Russia began its invasion of Ukraine in February 2022. President Vladimir Putin announced in 2017 that the Bank of Russia would issue a Central Bank Digital Currency (CDBC). In February 2022, many commentators suggested Russia could evade international sanctions using cryptocurrency. Though a CBDC is much different from a private cryptocurrency, a digital ruble could limit Russia’s dependence on using foreign currencies, such as the US dollar.

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