Russian rouble steady despite strong oil price

MOSCOW: The Russian rouble was steady on Friday with a finance ministry plan to buy around $4 billion in foreign currency in the coming weeks among factors keeping the rouble from following a rise in oil prices.

The central bank will start buying FX on behalf of the finance ministry from Jan. 15, restoring daily downside pressure on the rouble that eased in late August when it suspended FX buying amid increased market volatility.

The finance ministry said total FX purchases between Jan. 15 and Feb. 6 will reach the equivalent of 265.8 billion roubles  ($3.97 billion).

That was broadly in line with market expectations. A Reuters poll showed the central bank is expected to buy 280 billion roubles ($4.2 billion) worth of currencies by Feb. 6.

At 1045 GMT, the rouble was unchanged at 66.92 versus the dollar and had eased 0.3 percent to trade at 77.13 versus the euro.

Oil prices on Friday hit $62.49 per barrel for the first time since earlier December, which helped the rouble to firm earlier in the day before it reversed the gains.

Alexei Zabotkin, head of the central bank's monetary policy department, said the market had already priced in the resumption of foreign exchange purchases, so these operations should not change the market balance.

However, analysts at Rosbank said in a note that resumption of state FX buying will limit the room for rouble strengthening in the future.

The renewed FX buying comes against a background of investor caution over the rouble because of geo-political issues.

"We see the risk of sanctions still hovering over Russia from the U.S. side," said Jakob Christensen, chief analyst and head of emerging markets research at Danske Bank.

Russian stock indexes rose on Friday, in line with oil prices.

The dollar-denominated RTS index was up 0.6 percent to 1,149.88 points. The rouble-based MOEX Russian index was 0.35 percent higher at 2,442.76 points.