MOSCOW: The Russian rouble hit its strongest this year on Thursday as global appetite for risk surged on aggressive monetary easing by the European Central Bank (ECB) and as oil prices traded near three-month highs.
The rouble strengthened below 70 roubles per dollar for the first time since Dec. 24 in the minutes after the ECB cut all three of its interest rates and expanded its asset-buying programme.
By 1336 GMT it had slipped back slightly to trade 1 percent stronger against the dollar at 70.45 and 2.3 percent higher at 76.42 versus the euro.
The Russian currency is up over 6 percent against the dollar this month, largely because of a recovery in prices for oil, Russia's main export.
Brent crude rose above $40 on Monday for the first time in 2016 and on Thursday was trading at around $40.8 a barrel, down 0.7 percent on the day.
"Interest in the rouble is being driven not only by rising commodities prices but also by a recovery in speculative demand," Rosbank analysts said in a note.
Economists said that despite a strengthening rouble and falling inflation, the Russian central bank would probably hold its main lending rate at its next policy meeting on March 18.
"Just over a month ago the CBR was threatening the market with monetary tightening," Alfa Bank economist Natalia Orlova wrote to clients.
"Cutting its policy rate immediately after such strong guidance would be confusing for the market and negative for the CBR's ability to control expectations."
Russian share indexes also rose on Thursday, in line with moves on global markets where the ECB policy easing boosted sentiment.
The dollar-denominated RTS index was up 1.2 percent to 845 points, while the rouble-based MICEX was 0.5 percent higher at 1,891 points.
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