Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Russian rouble leaps to near 7-year high vs euro

Economy May 23, 2022 10:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A Russian rouble banknote is placed on euro banknotes in this illustration taken March 1, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -The Russian rouble firmed more than 6% against the euro on Monday to a near seven-year high, boosted by capital controls, strong oil prices and an upcoming month-end tax period.

By 1338 GMT, the rouble had gained 6.3% to trade at 58.75 versus the euro, its strongest point since early June 2015.

It was 4.6% stronger against the dollar at 57.47, not far from 57.0750, its strongest mark since late March 2018, hit on Friday.

The rouble has firmed about 30% against the dollar this year despite a full-scale economic crisis in Russia, making it the - albeit artificially supported by controls imposed in late February to shield Russia's financial sector after its decision to send tens of thousands of troops into Ukraine prompted unprecedented Western sanctions.

The rouble is being driven by export-focused companies that are obliged to convert their foreign currency revenue after the sanctions froze nearly half of Russia's gold and forex reserves.

While the central bank and government leave restrictions in place, the rouble could continue to strengthen further in the medium term, said Tinkoff Investments analysts.

"Closer to autumn, the exchange rate may start to stabilise nearer to the 60-65 level as imports recover and restrictions are potentially lifted."

Otkritie Bank analysts said the rouble may firm to 55 to the dollar within a month before weakening to 70-80 by year-end.

Russian demands that foreign buyers pay for gas in roubles has also contributed to the rouble's recent rally, analysts said last week.

The supply of foreign currency from exporters, high oil prices and an upcoming month-end tax period that usually prompts export-focused companies to convert their forex revenues into roubles to meet local liabilities are all supporting the Russian currency, said BCS Express in a note.

CENTRAL BANK INTERVENTIONS?

The Vedomosti daily reported on Monday, citing sources, that the central bank had started purchasing foreign currency in order to stop the rouble's uncontrolled strengthening.

The central bank denied the report, saying "this information does not correspond to reality".

If the central bank were carrying out such interventions, the effect on the rouble rate would be more noticeable, said Promsvyazbank analysts.

"Nevertheless, such news could influence the behaviour of market participants and provoke a weakening of the rouble."

Russian stock indexes were mixed.

The dollar-denominated RTS index was up 2.2% to 1,266.8 points. The rouble-based MOEX Russian index was 2.6% lower at 2,311.2 points.

Russian rouble leaps to near 7-year high vs euro
 

Related Articles

EU agrees rulebook for 'Wild West' crypto markets
EU agrees rulebook for 'Wild West' crypto markets By Reuters - Jul 01, 2022 1

By Huw Jones and Tom Wilson LONDON (Reuters) - The European Union on Thursday reached a provisional deal on the world's first set of comprehensive rules to regulate what one...

Dollar Edges Higher, Lifted by Safe Haven Demand
Dollar Edges Higher, Lifted by Safe Haven Demand By Investing.com - Jul 01, 2022 5

By Peter Nurse Investing.com - The U.S. dollar edged higher in early European trade Friday, trading close to the highs of the year on safe-haven demand as central banks take on...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
SREEDHAR ASHOK
SREEDHAR ASHOK May 23, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This is called boomerang effect. Bitter lesson for EU...situation like Devil (US) and the Deep sea(Russia).
Tre Hsi
Tre Hsi May 23, 2022 10:20AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this is not a real FX rate, Russian govt's captial control is the only reason ruble is going up, take that away it will drop back to 120/$ in 2 days
Attila Nyikos
Attila Nyikos May 23, 2022 10:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nice result of the embargo against Russia. Buy ukrain hrivna idiots. Russia is not Afghanistan, Syria, Africa ...
jason xx
jason xx May 23, 2022 5:20AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Take away the capital controls and it would be in the toilet. stop reporting this garbage we hate Russia
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email