Foreign Currency

Rouble soars to over six-month high as Russia lifts state FX sales

Updates at 1052 GMT

MOSCOW, Jan 15 (Reuters)The Russian rouble climbed to a more than six-month high against the dollar, euro and yuan on Monday, buoyed by the start of larger state forex sales and limited demand for foreign currency at the start of the year from importers.

By1052 GMT, the rouble was 1% stronger against the dollar at 87.50 RUBUTSTN=MCX, its strongest since June 30, 2023.

From Monday, Russia’s finance ministry has switched to making foreign currency sales from purchases after December oil and gas revenue was lower than expected.

The finance ministry’s currency interventions are carried out by the central bank. In August 2023, the central bank deferred foreign currency purchases until the new year to avoid aggravating pressure on the rouble, which tumbled past 100 to the dollar in August and October.

The central bank is set to sell the equivalent of 16.7 billion roubles ($190 million) of foreign currency a day until the end of January.

“This is quite a large amount, which will contribute to the continued strengthening of the rouble,” said Alor Broker’s Alexei Antonov.

The traditionally weak demand for dollars and yuan at the start of the year from importers should also support the currency, Antonov added.

Capital controls introduced in October are still supporting the rouble. The combination of factors influencing the currency makes forecasting very difficult, said Alexei Klimyuk of Alfa Wealth.

“Experts, analysts and simply investors almost always have their fingers in the sky,” Klimyuk said. “It is not a big mistake to think the rouble rate is manageable: the government can directly influence it through its decisions that stimulate or restrict supply and demand in the market.”

Brent crude oil LCOc1, a global benchmark for Russia’s main export, was down 0.7% at $77.77 a barrel.

Russian stock indexes were mixed.

The dollar-denominated RTS index .IRTS was up 0.9% to 1,146.3 points. The rouble-based MOEX Russian index .IMOEX was 0.1% lower at 3,183.5 points.

($1 = 87.9100 roubles)

(Reporting by Alexander Marrow Editing by Bernadette Baum)


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