The Russian rouble rallied to its strongest levels since 2018 on Friday, extending earlier gains ahead of main month-end tax payments that usually prompt export-focused companies to convert part of their foreign currency revenues.
The rouble, the second best-performing currency versus the dollar so far this year after the Ukrainian hryvnia, firmed towards 62 per greenback for the first time in many months, surprising the market that expected it to finish this year at around 64.20.
The rouble is supported by FX selling by Russian exporters as well as by non-resident demand, said Sberbank CIB, an investment arm of Russia's No.1 lender Sberbank.
"We expect the rouble to appreciate to USD/RUB 62.00 today," Sberbank CIB said.
As of 1336 GMT, the rouble was 0.6% stronger on the day at 62.06 after briefly touching 62.01, a level last seen on July 12.
Versus the euro, the rouble gained 0.7% to 68.91 after firming as far as to 68.78, its strongest since March 2018.
Further gains in the rouble are likely to be capped by market players' usual intention to minimise risks ahead of low trading activity due to Christmas and New Year holidays.
Russian stock indexes were slightly higher. The dollar-denominated RTS index was up 0.5% to 1,527.5 points. The rouble-based MOEX Russian index was up 0.05% at 3,009 points. Shares in Russia's largest gas producer Gazprom outperformed the broader market, gaining 1.3% to 254.6 roubles ($4.10) per share.
The agreement between Russian and Ukraine about gas supplies opens the door for Gazprom shares to advance to 260 roubles per piece, Alor brokerage said.
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