Direct negotiations between Russia and Ukraine restart, the ruble hits a near two-year high against the US dollar.

The Russian ruble to US dollar exchange rate has risen to its highest level in two years, as Russian negotiating representatives arrive in Turkey. This is expected to be the first direct talks between Moscow and Kyiv since 2022, and the demand for foreign currency within Russia has decreased. According to data from the Russian Central Bank, the ruble has climbed to 80.2237 rubles to 1 US dollar in the local market, the highest level since May 31, 2023. In the global over-the-counter trading market, the ruble's increase this year has exceeded 40%, surpassing gold and becoming the best performing asset. People have been optimistic about the possibility of the Russia-Ukraine war ending as US President Trump seeks to end the conflict, boosting the ruble this year. The Russian Central Bank stated in a report on Wednesday evening that there are also signs of a slowdown in the domestic demand for foreign currency. Since last June when Moscow Exchange was sanctioned by the US, leading to the cessation of trading in US dollars and euros, the Russian Central Bank has been using interbank trading to calculate the exchange rates. Russian President Putin announced on Wednesday evening that the Kremlin will send a group of experienced technical experts to participate in the negotiations with Ukraine in Istanbul, scheduled for today. US President Trump and Russian President Putin will not attend the possible first direct talks between Moscow and Kyiv in three years on Thursday. The delegation from the Kremlin will include presidential advisor Vladimir Medinsky and Deputy Minister of Defense Alexander Fomin. In the previous round of negotiations, Medinsky led the Russian delegation, which fell apart as the parties exchanged accusations over a draft agreement proposed by Russia. The Russian Central Bank stated that in addition to expectations of improvement in the geopolitical situation, stable currency supply from exporters and high interest rates have supported the rise in exchange rates. To curb inflation, the Russian Central Bank has maintained benchmark interest rates at a record high, creating a favorable environment for arbitrage trading and currency appreciation. The Russian Central Bank report on Wednesday stated that the demand for foreign exchange in Russia is gradually decreasing and has reached its lowest level since Moscow Exchange was sanctioned and trading in dollars and euros was suspended. Despite a significant drop in oil prices, the foreign currency sales related to exports only decreased by 2%, indicating that exporters are still converting their income into rubles at a steady pace.