Rouble recovery loses steam, stocks falls after new U.S. sanctions
2022.04.08 11:15
FILE PHOTO: A board with the logo is on display outside the office of the Moscow Exchange in the capital city of Moscow, Russia March 24, 2022. REUTERS/Maxim Shemetov
(Reuters) – The Russian rouble jumped to its strongest level since July 2020 against the euro on Friday but later pared gains, while stock indexes inched lower, weighed down by shares in oil companies that fell after the U.S. congress voted to ban Russian oil.
At 0736 GMT, the rouble eased 0.6% to 76.23 against the dollar, heading away from its strongest level since Feb. 11 of 74.2625 it hit on Thursday.
Against the euro, the rouble rallied to 80.2225, a level last seen in July 2020, before reversing gains and sliding 0.5% on the day to 81.82.
Moves in the rouble were jittery and trading volumes on the Moscow Exchange were below average in the past weeks, but the rouble has fully recovered to levels seen before Russia started what it calls its “special military operation” in Ukraine on Feb. 24.
The rouble has recently been steered by mandatory conversion of dollar and euro revenues by export-focused companies, while demand for forex has been limited by capital controls that Russia imposed as the rouble crashed to record lows in March.
Demand for foreign currency is currently hampered by a ban on buying cash dollars and euros as well as by a 12% commission on buying forex online or through a bank.
The rouble will lean towards firming without action from the central bank and can enter the 70-75 range to the dollar during the day, Promsvyazbank analysts said in a note.
But given the latest rouble firming, some recovery in demand for FX is possible even despite the commission, Otkritie bank said in a note.
Finance Minister Anton Siluanov said on Wednesday his ministry together with the central bank were working on measures to make the rouble exchange rate more predictable and less volatile.
On the stock market, the dollar-denominated RTS index slid 0.5% to 1,087.4 points. The rouble-based MOEX Russian index was 0.1% lower at 2,631.8 points.
Shares in oil firm Bashneft underperformed the market by losing 3.2% on the day, while shares in its rival Lukoil were down 0.5%.
Oil stocks took a hit after the U.S. Congress voted to impose further economic pain on Russia over its actions in Ukraine, passing one measure to remove its “most favoured nation” trade status and another to ban oil imports.
