Russian rouble surges past 67 vs dollar, stocks mixed

Russian rouble coin is seen on this illustration taken April 7, 2022. REUTERS/Dado Ruvic/Illustration

Might 11 (Reuters) – The Russian rouble pared early short-lived losses and surged previous 67 towards the U.S. greenback on Wednesday, artificially boosted by capital controls, whereas shares have been combined after an extended weekend.

The rouble has been risky for weeks in skinny commerce in Moscow, propped up by capital controls however pressured by issues about extra sanctions being imposed on Moscow over what it calls a “particular navy operation” in Ukraine.

At 1508 GMT, the rouble was up 3% to 67.28 towards the greenback on the Moscow Trade after hitting 66.50, not removed from final week’s excessive of 65.31 – its strongest degree since March 2020.

“Exporters are more likely to beef up FX gross sales beginning right this moment, as they want roubles to pay taxes in two weeks. Additionally, they are going to be promoting FX revenues accrued over the lengthy weekend,” Sberbank CIB mentioned in a word, explaining beneficial properties within the rouble.

In opposition to the euro, the rouble jumped 4% to 70.33 , round ranges the place it used to commerce earlier than the COVID-19 pandemic hit in 2020.

The rouble is at the moment being supported by the obligatory conversion of overseas foreign money by exporters and restrictions on capital outflows, whereas demand for FX from importers stays weak. With out the emergency measures imposed by the central financial institution the rouble would have been weaker.

“The Russian rouble’s fortunes are more and more disconnected from the well being of the Russian financial system as worldwide sanctions tighten,” scores company Scope mentioned in a word.

Additional rouble appreciation may pose dangers for the finances, analysts say. Addressing the problem, the central financial institution has indicated it may ease a few of its capital controls.

The rouble may even see draw back stress mounting within the medium time period because the nation’s commerce surplus ought to decline after Russia issued particulars on so-called parallel imports of products, Promsvyazbank analysts mentioned in a word.

Final week, Moscow printed a listing of products from overseas carmakers, expertise firms and client manufacturers that the federal government has included in a “parallel imports” scheme aimed toward shielding customers from enterprise isolation by the West. learn extra

Russian inventory indexes have been combined. The dollar-denominated RTS index (.IRTS) rose 2.5% to 1,115.5 factors. The rouble-based MOEX Russian index (.IMOEX) shed 0.3% to 2,385.1 factors, dragged decrease by the firmer rouble.

The closest technical help for the MOEX index is at 2,160, whereas the resistance lies at 2,840, Finam brokerage mentioned.

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Reporting by Reuters
Modifying by Mark Potter and Angus MacSwan

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