Last summer, Russia’s Central Bank relaxed capital controls on its currency, making the rouble almost fully convertible with other currencies. As a result, the rouble is quickly gaining respectability and becoming popular both among traders, who are speculating the rouble will appreciate, and investors, who are driving the currency higher with their purchase of Russian securities. Soaring commodity prices and a red-hot Russian economy have driven increases in capital inflows. While the rouble is no longer pegged directly to the Dollar, however, it remains linked to a basket of currencies, and its appreciation is being carefully controlled by Russia, so a rapid run-up is still unlikely. The Gulf Times reports:

“There is no doubt that it’s being closely managed. But that said I think it’s still a great, very low volatility currency versus the basket and that’s important in the current environment of emergency market currency weakness and volatility.”