Russian rouble edges up as oil prices rise, tax payments approach

The Russian rouble edged higher against the dollar on Wednesday ahead of two OFZ treasury bond auctions by the finance ministry, waiting for support through upcoming tax payments as oil prices ticked higher.

At 0725 GMT, the rouble was 0.1% stronger against the dollar at 80.01 and had gained 0.5% to trade at 86.26 versus the euro.

It had firmed 0.1% against the yuan to 11.32.

Month-end tax payments, which usually lead exporters to convert foreign currency revenue to meet local liabilities, should provide the rouble with some support.

Those taxes are due on May 29.

“It’s time for the rouble to go up,” said Alor Broker in a note, suggesting that tax payments support should help lift the Russian currency after five sessions of consolidating around the 80 mark to the dollar.

The Kremlin’s plan to introduce a $1 billion monthly cap from June on the amount of foreign currency residents can buy on the domestic market to settle transactions with exiting foreign firms should buttress the rouble, Rosbank analysts said, expecting the currency to strengthen to 73-75 in the coming months.

Russian rouble edges up, Yandex shares hit over 1-year high

Brent crude oil, a global benchmark for Russia’s main export, was up 0.8% at $77.43 a barrel, earlier hitting a more than three-week high. Russian stock indexes were mixed.

The dollar-denominated RTS index was up 0.2% to 1,039.6 points.

The rouble-based MOEX Russian index was 0.1% lower at 2,640.4 points.

Shares in energy giant Gazprom slid to an over two-month low, extending losses after the Kremlin-controlled firm said its board had decided not to pay a full-year dividend as net profit slumped more than 40% last year due to a tax hike in the second half of the year.

Despite Gazprom’s drop, other companies’ dividend payments are supporting the overall market, said Sinara Investment Bank.

“Geopolitical tensions have again risen, but no so much that investors have quite forgotten about attractive dividends, so the market, we believe, will for now continue crawling upwards,” Sinara said.