Rouble rallies after Russia orders troops to return to bases after drills

MOSCOW: The rouble jumped to a near one-week high against the dollar on Thursday after Russia signalled an end to military drills near its border with Ukraine, easing some of the geopolitical risk pressure that has built up in recent weeks.

Russia ordered its top army command to begin returning troops to their permanent bases inside the country from Friday. Tensions with the West had risen in recent weeks over a major Russian military buildup near Ukraine.

By 1140 GMT, the rouble was 1.2% stronger against the dollar at 76.69, its strongest since April 16 and close to a one-month high.

It had gained 1% to trade at 91.28 versus the euro .

The rouble was already strengthening earlier in the day, trading around 0.5% higher versus the greenback, responding favourably to President Vladimir Putin striking a relatively conciliatory tone in a speech on Wednesday.

Putin said Moscow wanted to "maintain good relations" internationally and avoid burning bridges on a day when police rounded up more than 1,700 protesters as Russians in dozens of cities took part in rallies organised by allies of hunger-striking Kremlin critic Alexei Navalny over his failing health in jail.

Russia's upcoming month-end tax payment period, which usually prompts export-focused companies to convert part of their revenues to meet local liabilities, was also supporting the rouble, said Veles Capital analyst Yuri Kravchenko.

The central bank will address the latest market turmoil at a board meeting on Friday. It is expected to hike its key interest rate by 25 or 50 basis points amid high inflation and intensified geopolitical risks.

Brent crude oil, a global benchmark for Russia's main export, was down 0.7% at $64.89 a barrel.

Russian stock indexes were higher. The dollar-denominated RTS index was up 2% to 1,493.9 points. The rouble-based MOEX Russian index was 0.8% higher at 3,589.4 points.