The Russian ruble strengthened yesterday, remaining a long way from Friday’s three-month high against the US dollar, but still supported by local fears that new sanctions could limit investors’ ability to trade foreign currencies in Moscow.
Russian markets expect more sanctions after Russian President Vladimir Putin signed treaties annexing four Ukrainian regions last week, a move that Western governments and Kyiv have said breaches international law.
At 8:01am GMT, the ruble was 2 percent stronger against the US dollar at 57.27, some way off 53.23, its strongest mark since July 1, hit in an unstable session on Friday.
Photo: Reuters
“To say that the ruble was volatile on Friday would be an understatement,” Locko Invest head Dmitry Polevoy said. The currency was “56.90 at breakfast, 53.20 at lunch and near 58.45 at dinner.”
The ruble had gained 2.7 percent to trade at 55.20 versus the euro, after reaching a near eight-year high of 50.7250 on Friday. It had firmed 2.2 percent against the yuan to 8.156.
With the conclusion of last week’s month-end tax period, which usually sees export-focused firms convert FX revenues into rubles to pay local liabilities, Polevoy said there should be no strengthening of the level seen on Friday.
Russian stock indices were higher, but remain highly susceptible to geopolitics.
“For the Russian market, geopolitical risk remains on the agenda after Gazprom suspended its gas supplies to Italy over the weekend, in what appears to be the latest iteration of the conflict between Moscow and the EU over the supply of natural gas,” Alfa Bank said in a note.
The US dollar-denominated RTS index was up 3.5 percent to 1,077.4 points. The ruble-based MOEX Russian index was 1.4 percent higher at 1,982.1 points.
Russian manufacturing activity last month grew at its fastest rate in more than three years, driven by rises in production, new orders and client demand, a business survey showed yesterday, although Western sanctions continued to weigh on export business.
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