MOSCOW: The rouble strengthened on Thursday, pulling clear of a more than three-month low against the dollar and heading towards the 63 mark, as volatility sparked primarily by elevated geopolitical risks continued to buffet Russian markets.
By 1421 GMT, the rouble was 1.4% stronger against the dollar at 63.53, pulling away from its lowest point since July 6 of 64.9275, hit on Wednesday, after nine straight sessions of weakening.It gained 0.1% to trade at 62.68 versus the euro and was unchanged at 8.68 against the yuan .
“We assume exporters’ FX sales are what helped the rouble stabilize yesterday, as spot FX volumes on the Moscow Exchange jumped to $6.5 billion, around 60% above the average level,” said SberCIB Investment Research in a note. “Meanwhile, the volume traded in CNY/RUB reached a record $2.1 billion.”
The central bank said volatility in FX markets increased in late September amid growing geopolitical risks and expectations of more sanctions against Moscow over its actions in Ukraine.“A wide range of participants tried to get out of ‘toxic’ currencies and move into currencies of friendly countries (predominately the yuan),” the Bank of Russia said in a report on Thursday.
The rouble is the world’s best-performing currency this year, supported by capital controls and slumping imports after Western governments unloaded hefty sanctions on Russia, while scores of foreign companies paused operations in the country.Recent escalation in Ukraine is likely to weigh on risk appetite, analysts have said.Promsvyazbank analysts attributed the rouble’s gains on Thursday to some overheating in the market and some participants’ tendency to lock in short-term profits.
Reduced supply of foreign currency from export-focused firms, who will only begin preparing for this month’s tax payment period from next week, has hindered the rouble in recent sessions, Banki.ru Chief Analyst Bogdan Zvarich said.
Brent crude oil, a global benchmark for Russia’s main export, was down 0.5% at $92.0 a barrel.
Russian stock indexes were steady to higher.The dollar-denominated RTS index was up 1.4% to 967.9 points. The rouble-based MOEX Russian index was unchanged at 1,952.1 points.
SPB Exchange, following on from rival Moscow Exchange, late on Wednesday said it would exclude trading of Meta Platforms Inc. securities after the US company was added to financial monitoring agency Rosfinmonitoring’s list of “terrorists and extremists”.