The rouble firmed on Monday, supported by the prospect of favourable tax payments this week, offsetting lower oil prices and a general negative outlook as the Russian market looks ahead to Friday’s central bank rate decision.
By 1139 GMT, the rouble was 0.6% stronger against the dollar at 81.23 and had gained 0.4% to trade at 89.41 versus the euro. It had firmed 0.4% against the yuan to 11.77.
The Russian currency accelerated a months-long slide in early April, tumbling to a one-year low at 83.5 against the dollar, on a lack of foreign currency in Russia and the sale of Western businesses in the country.
Russian rouble edges higher after slipping on oil price drop
“Now the market… has calmed down,” VTB Bank CEO Andrei Kostin said on state news channel Russia-24. “According to our data, the population is now selling foreign currency more than buying it.”
The rouble is set to see support as this month’s relatively high oil prices boost export revenue, although prices have dipped back towards $80 per barrel in recent sessions from highs above $87.
On Monday, Brent crude oil, a global benchmark for Russia’s main export, was down 0.3% at $81.45 a barrel.
Weaker oil prices and talk of a near-total ban on exports to Russia by Group of Seven (G7) countries were among the factors creating a negative external backdrop on Monday, Otkritie Research analysts wrote in a note.
“However, the rouble is strengthening in Monday’s morning hours thanks to demand from exporters ahead of tax payments,” they said.
The rouble is expected to gain support from month-end tax payments that usually lead exporters to convert foreign currency revenue to meet local liabilities. Those taxes are due on April 28.
Also on April 28, the central bank meets on rates. Inflationary risks in Russia must decrease in order to create room for interest rate cuts, Central Bank Governor Elvira Nabiullina said last week, retaining the bank’s hawkish stance and the likelihood of another rate hold at 7.5%.
Russian stock indexes were higher.
The dollar-denominated RTS index was up 0.6% to 1,025.5 points. The rouble-based MOEX Russian index was 0.2% higher at 2,643.9 points, earlier touching a more than one-year high.
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