Russian rouble steadies near 60.5 vs dollar in early Moscow trade

Russian rouble steadies near 60.5 vs dollar in early Moscow trade
Russian rouble steadies near 60.5 vs dollar in early Moscow trade
© Reuters. FILE PHOTO: A mock-up of the newly designed Russian 100-rouble banknote is on display during a presentation in Moscow, Russia June 30, 2022. REUTERS/Evgenia Novozhenina

MOSCOW (Reuters) – The Russian rouble steadied near its lowest in more than a week against the dollar in early Moscow trade after the peak of a favourable tax payments period passed and as Russian stocks clipped a two-month high.

At 0732 GMT, the Russian currency was 0.1% weaker against the dollar at 60.55. After a wild swing at the market open, the rouble was up 1.1% to trade at 59.99 versus the euro.

“There are no significant drivers to support the rouble,” said Promsvyazbank analysts, expecting the currency to weaken smoothly to the 61 mark against the greenback.

Month-end tax payments, which usually see Russia’s exporters converting their foreign currency earnings into roubles to pay to treasury, ended last week.

“We note that Nord Stream is due for repair work this week, which could also generally weaken the national currency,” Promsvyazbank added.

Russia has cut flows through Nord Stream 1 to just 20% of capacity and plans to shut it down entirely for three days next week, citing maintenance issues with turbines. The EU accuses it of using gas as a weapon to fight back against Western sanctions over Ukraine.

The rouble has been the world’s best-performing currency this year, buoyed by emergency capital controls rolled out by the central bank in a bid to halt a mass sell-off.

Its volatility has subsided after wild swings that saw it hit a record low of 121.53 to the dollar in Moscow trade in March, soon after Russia sent tens of thousands of troops into Ukraine. It then rallied to its strongest in seven years of 50.01 in June.

Volatility in the rouble may soon increase again. Moscow Exchange will stop accepting dollars as collateral to underwrite transactions from today and intends to restart early morning trading in September. The central bank has also eased FX restrictions for banks.

Russian stock indexes were climbing.

The rouble-based MOEX Russian index was 0.5% higher at 2,279.3 points, its highest point since June 30. The dollar-denominated RTS index was up 0.3% to 1,186.5 points.

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