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The Russian ruble hits its highest level since March

On Thursday, the Russian ruble temporarily hit its highest level against the US dollar since March 2020, helped by capital controls. Meanwhile, stock indexes rose as investors awaited news of possible additional penalties against Moscow.

The volatile currency peaked at 65.31 per dollar in early trade on the Moscow Stock Exchange but was trading at 66.14 by 1339 GMT, up 0.2 percent from Wednesday’s close.

The ruble has appreciated in recent weeks as export-oriented companies need to exchange foreign currency. In addition, demand for the dollar and euro has been weak as imports have fallen and cross-border transactions have been restricted.

The ruble’s moves are more pronounced than usual as central bank regulations reduced market liquidity to bolster financial stability after Russia invaded Ukraine by tens of thousands of troops on February 24.

Meanwhile, trading activity is light as markets are only open three days this week, amid Russia’s long May holiday.

The ruble was 1% firmer against the euro at 69.77, remaining at levels last seen in February 2020. The ruble reacted little to the US Federal Reserve’s decision to raise its benchmark overnight interest rate by half a percentage point, the most significant hike in 22 years.

Sanctions and investment restrictions hampered the direct impact of US monetary policy on the Russian economy, according to Dmitry Polevoy, Head of Investment at LockoInvest. However, Russia would continue to face the impact of global inflation and commodity prices.

Russian stock indices rose. The US Dollar RTS Index (.IRTS) rose 2.7 percent to 1,144.0 points. The ruble-based index MOEX Russian (.IMOEX) gained 1.2 percent to 2,402.0 points.

currencies

On Friday, the dollar was on course for a fifth consecutive week of gains against its main rivals ahead of the release of a widely publicized US jobs report, which should support the case for swift monetary tightening.

The dollar rose against the yen for the ninth week as benchmark US Treasury yields resumed their rise — more than 3.1 percent overnight — after a brief tumble after the Federal Reserve cut interest rates mid-week raised half a percentage point.

The euro fell 0.11 percent on Friday to $1.0529, bringing its weekly loss down 0.12 percent, but the currency was generally flat after hitting a five-year low of $1.04695 last week -dollar had fallen.

Sterling was down 0.05 percent at $1.23475, down 1.81 percent for the week. It fell 2.22 percent overnight, the biggest in two years, as the Bank of England warned of a possible recession while raising interest rates by half a point.

Bitcoin fell 0.84 percent to $36,225, extending its 7.94 percent drop from the previous session when it hit a low of $35,579.40, a level not seen since late February.

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https://www.financebrokerage.com/russian-rouble-hits-the-highest-level-since-march/ The Russian ruble hits its highest level since March

Callan Tansill

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