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

Rouble off 2-week highs as Putin signs capital control decree

Economy Jun 09, 2022 09:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Russian Rouble banknote is placed on U.S. Dollar banknotes in this illustration taken, February 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -The Russian rouble slid off a two-week high on Thursday after President Vladimir Putin signed a decree that the market interpreted as a potential means for export-focused companies to scale down conversion of foreign currency.

Exporters will now need to convert forex into roubles in an amount set by a government commission, the decree said, without providing details.

The move was seen as paving the way to an imminent easing of capital controls that had obliged exporters to convert 80% of their revenues into roubles after Russia sent tens of thousands of troops into Ukraine on Feb. 24. This ratio was later lowered to 50% in May.

By 1342 GMT, the rouble was 0.3% weaker against the dollar at 59.60 , earlier clipping its strongest point since May 25 of 57.4075.

It was still 0.3% stronger on the day at 63.33 versus the euro after touching a two-week high of 61.20.

Putin's decree, that in theory could lead to a lower supply of foreign currency by exporters, could send the rouble weaker to levels of 65 to the dollar, which are more comfortable for the budget, Promsvyazbank analysts said in a note.

"This decree is a very good illustration that the dollar below 60 really hurts exporters, especially non-commodity ones, and the budget," said Evgeny Suvorov, an analyst at CentroCreditBank.

The central bank declined to comment. The finance ministry did not immediately respond to a Reuters request for comment.

The move comes as the rouble has become the world's best-performing currency this year, steered by capital controls for more than three months. A strong rouble dents Russia's revenues for selling commodities abroad for foreign currency.

The central bank is now in focus as it will hold a rate-setting meeting on Friday. A rate cut could put some downside pressure on the rouble and support prices of OFZ treasury bonds.

A majority of analysts polled by Reuters expect a 100-basis-point rate cut to 10% as the bank tries to make lending more affordable amid sluggish consumer demand and a pause in inflation.

But a sharper cut to 9% was also possible as economic prospects and inflation easing give the central bank more room to manoeuvre, BCS Global Markets said.

Consumer inflation in Russia slowed to 17.10% in year-on-year terms in May from 17.83% in April, which was its highest level since January 2002, data showed on Wednesday.

Russian stock indexes were down.

The dollar-denominated RTS index fell 1% to 1,218.4 points. The rouble-based MOEX Russian index shed 1.3% to 2,288.2 points.

($1 = 59.2000 roubles)

Rouble off 2-week highs as Putin signs capital control decree
 

Related Articles

Sudden crypto drop sends bitcoin to three-week low
Sudden crypto drop sends bitcoin to three-week low By Reuters - Aug 19, 2022 8

By Tom Westbrook and Hannah Lang SINGAPORE/WASHINGTON (Reuters) -Cryptocurrencies fell sharply on Friday, with sudden selling dragging bitcoin to a three-week low, with analysts...

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.
 
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