Russian rouble firms, MOEX hits record high ahead of Putin-Biden summit

MOSCOW: The Russian rouble strengthened on Tuesday on the eve of a summit between President Vladimir Putin and his US counterpart Joe Biden, and high oil prices pushed Russian stocks to a record high.

At 0748 GMT, the rouble was 0.4% stronger against the dollar at 71.80, not far from 71.55, a level it reached on Friday for the first time since July 27 last year.

It had gained 0.2% to trade at 87.21 versus the euro.

Wednesday's US Federal Reserve policy meeting was also in focus, with investors watching for hints of any change to the US monetary policy outlook.

"Expect prudence to be in broad display and trade to be volatile ahead of the US Fed decision and Putin-Biden Summit," BCS Global Markets said in a note.

The rouble has been on the mend in the past few weeks ahead of the meeting in Geneva, the first between the two leaders since Biden took office in January and which comes as the bilateral relationship stands at its lowest point in years.

The central bank's decision to raise the key rate by 50 basis points to 5.5% and its promise of more hikes supported the rouble late last week.

Higher rates prop up the rouble by making it more attractive for carry trades in which investors borrow low-yielding currencies, such as the US dollar, and convert them into roubles to buy high-yielding bonds.

Brent crude oil, a global benchmark for Russia's main export, was up 0.6% at $73.28 a barrel, supporting Russian stock indexes.

The dollar-denominated RTS index was up 0.4% to 1,694.4 points. The rouble-based MOEX Russian index was 0.1% higher at 3,862.4 points, earlier touching a record high of 3,865.20 points.