Why the Brazilian Real Danced Past the Ruble: The 9.6% Upswing Few Saw Coming
In a world awash with headline risk and currency churn, one FX pair has quietly pirouetted past the crowd: over the last three months, the Brazilian real (BRL) has strengthened by 9.6% against the Russian ruble (RUB). For the uninitiated, this isn’t just a numerical footnote—it’s a story of policy muscle, geopolitical friction, and the quirks of two commodity giants on divergent paths.
The Iron Grip of Selic: Brazil’s Rate Stance Steals the Show
Brazilians know how to party, but their central bankers know how to keep the punch bowl spiked with caution. Since January, the Selic rate has stood at a formidable 15%. Even as core inflation dipped to 4.9% in July 2025 and food-at-home prices actually fell by 1.9% month-on-month, the Banco Central do Brasil refused to blink. This unrelenting hawkishness—while debt-to-GDP crept up to 76.6%—has created a yield environment that FX traders can’t ignore.
With the Selic expected to remain untouched through December 2025 (according to the median of 36 economists polled), the real offers juicy carry at a time when global monetary policy is only just hinting at easing. The result? Foreign capital, which usually flirts with danger elsewhere, has found an unlikely safe haven in the BRL—even as Brazil’s own fiscal clouds gather.
Sanctions and Shadows: Russia’s Ruble Backs Into a Corner
Meanwhile, the Russian ruble’s story is a tale of resilience under siege, but also of structural fatigue. Energy revenues—the lifeblood of the state—have been throttled by sanctions, with oil-related income in August 2025 sinking to its lowest since the Ukraine war began. The fiscal share of oil and gas, once 45% of Moscow’s budget, is now a headache for the Kremlin’s accountants. Even as Russia pivots to Asian markets and channels trade through alternative corridors, capital controls and a shadow fleet can only plug so many leaks.
The result is a ruble that, while not in freefall, lacks the speculative allure of the real. For the first half of 2025, the ruble was one of the few EM currencies to eke out a gain against the dollar. But that strength is built on sand: dwindling reserves, relentless sanctions (over 16,500 since 2022), and the gnawing sense that the next EU or US package could cut deeper still.
Commodities: Same Game, Different Scoreboard
Both Brazil and Russia are commodity powerhouses, but the scoreboard has flipped. Brazil’s agricultural exports—think soybeans, coffee, and beef—continue to underpin its external accounts, even as Chinese demand for iron ore and soybeans wobbles. The country’s current account deficit, a modest 2.8% of GDP for 2024, is dwarfed by healthy FDI inflows (2.1% of GDP) and a record-low unemployment rate of 5.8% as of June 2025. Meanwhile, Brazil’s trade ties are diversifying: while US tariffs are a cloud, deeper links with the EU (pending FTA ratification) and China help buffer shocks.
Contrast this with Russia, where the commodity windfall is more a trickle. Oil prices have hovered near five-year lows (Brent at $63.29/bbl), and Western buyers are off the guest list. The ruble’s fate is increasingly tied to export deals denominated in non-dollar currencies, but even here, liquidity and convertibility are perennial obstacles.
The BRICS Waltz: Currency Experiments and Realpolitik
There’s a macro subplot to this FX drama: the BRICS bloc’s campaign to dethrone the dollar. Over 65% of BRICS trade is now settled in local currencies, and digital-currency pilots are popping up from Shanghai to São Paulo. Yet, internal rifts persist—Brazil has nixed the idea of a common BRICS currency, preferring bilateral arrangements, while India remains lukewarm on de-dollarisation altogether.
Ironically, these efforts have made the real more liquid and more desirable in intra-BRICS trade, particularly as settlement with China and other partners grows. The ruble, by contrast, is often the vehicle of necessity rather than choice, increasingly isolated by design.
Technicals and Traders: Momentum Finds Its Groove
Charts tell their own story: after a month of range-bound trading, USD/BRL broke sharply lower on September 13, 2025, falling to 5.34—its lowest in months. With support at 5.34 and resistance at 5.42, traders have found that betting on the real is as much about momentum as it is about macro.
Short-term, the technical bias remains bearish for USD/BRL, but the macro fundamentals—high carry, resilient external accounts, and a central bank that shows no sign of blinking—tilt the table in favor of the BRL. The real’s 9.6% outperformance against the ruble in just three months is a testament to this rare confluence.
Not Just a Number: What It Means for Markets
The 9.6% surge isn’t just a number; it’s a living index of policy resolve, geopolitical stress, and the surprising strength of an emerging-market currency that refuses to play by the old rules. For now, the Brazilian real leads the dance. The ruble, battered but not broken, watches from the wings—proof that in FX, as in life, context is everything and the choreography can change without warning.