Russian rouble firms against broadly weaker dollar

MOSCOW: The Russian rouble strengthened past 73 against a broadly weaker dollar on Monday, but its upside was capped by falling oil prices and limited risk appetite as the COVID-19 pandemic continues to hinder global economic growth.

By 1129 GMT, the rouble was 0.4% stronger against the dollar at 72.86, edging towards a more than one-month high. It had gained 0.3% to trade at 86.62 versus the euro .

"The short-term target range for the Russian currency is 72.5-73.5 against the dollar," Sberbank Asset Management said in a note.

The rouble was one of many currencies supported last week by dovish rhetoric from the U.S. Federal Reserve and that sentiment that continued into Monday.

The active inflow of non-residents' funds into OFZ treasury bonds was helping the rouble, said Dmitry Polevoy of Locko Invest, a trend that started last month.

Russian rouble steadies near 73 vs dollar

The Russian central bank lifted its key interest rate by a hefty 100 basis points on July 23. Expectations of that rate hike and the actual move sparked demand for OFZ bonds and a weekly inflow of foreign money into government papers reached its 2021 high.

A slight depreciation in the rouble was still possible against the backdrop of Russia's country risk and foreign investors' interest in developed markets, Promsvyazbank said in a note.

Brent crude oil, a global benchmark for Russia's main export, was down 1.1% at $74.57 a barrel but this did not stop Russian stock indexes, which are attracting foreign investors due to relatively high dividend yields, from rising.

The dollar-denominated RTS index was up 0.9% to 1,640.1 points. The rouble-based MOEX Russian index was 0.6% higher at 3,793.7 points.

Shares in steel pipemaker TMK were up 4.5%, jumping for the second successive session after its board recommended a dividend of 17.71 roubles ($0.2422) per share on Friday for the first half of 2021.