Rouble hits 2-week high vs dollar as oil climbs, sanctions threats ease
- Rouble has risen 1.2% against the dollar to 74.60, earlier hitting its strongest mark since Jan. 22.
- For years a slave to the oil price, the rouble has decoupled from Brent crude, which was up 1% at $59.43 a barrel
MOSCOW: The Russian rouble soared on Friday, helped by rising oil prices and a reduction in foreign currency purchases by the finance ministry, while the risk of new Western sanctions over Kremlin critic Alexei Navalny's jailing marginally eased.
By 1336 GMT, the rouble has risen 1.2% against the dollar to 74.60, earlier hitting its strongest mark since Jan. 22. It gained 0.9% to trade at 89.55 against the euro , a more than two-week high.
For years a slave to the oil price, the rouble has decoupled from Brent crude, which was up 1% at $59.43 a barrel, with geopolitical risks and sanction threats exerting more of an influence on its value. When oil prices last hit current levels in February 2020, the currency traded at around 63.5.
Gains in rouble remained limited after Navalny, jailed this week for nearly three years for parole violations he called trumped up, was back in court on charges that he slandered a World War Two veteran.
Nationwide protests and Western condemnation have pressurised the rouble in recent weeks, but the EU's foreign policy chief, Josep Borrell, during a rare visit to Moscow on Friday said there was not yet a formal proposal for new EU sanctions on Russia.
The rollout of COVID-19 vaccines and a $1.9 trillion relief package from the United States was also supporting risk appetite.
"Russia should not be immune, at least for now. And, thus far, sanction noise has been just that... hence, angst has eased," said BCS Global Markets in a note.
Russia's finance ministry slashed its foreign currency buying to 2.4 billion roubles ($32.1 million) a day for the month ahead, a near three-fold decrease on the previous month, supporting the rouble.
Locko-Invest said the bright outlook meant its medium-term view on the rouble remained unchanged, envisaging a RUB/USD rate at 72-73 in the coming months.
Russian stock indexes were climbing.
The dollar-denominated RTS index was up 1.7% at 1,426.7 points. The rouble-based MOEX Russian index was 0.2% higher at 3,379.8 points.
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