MOSCOW: The rouble gave up earlier gains and eased past the 74 mark versus the dollar on Tuesday after President Vladimir Putin blamed the West for escalating tensions in Europe, saying it had incorrectly assessed the outcome of the Cold War.
By 1128 GMT, the rouble was up 0.1% on the day at 74.09 against the dollar, slipping from Tuesday’s peak of 73.72 towards 74.50 it hit Monday, its weakest level since Dec. 7.
“The focus will be geopolitics - President Putin will meet with Russia’s Security Council today,” Sberbank CIB said in a note.
Speaking to senior military officials, Putin said Russia would respond “adequately” to any Western aggression and would develop its army further.
Putin is expected to shed more light on Russia’s foreign affairs, among other issues, at his annual media conference on Thursday.
The rouble is likely to remain within a range of 73.5-74.5 against the greenback in the short term, leading towards the lower boundary if concerns about the new coronavirus variant Omicron do not intensify, Promsvyazbank wrote in a note.
Against the euro, the rouble added 0.1% to 83.53 .
The rouble remains supported by Russia’s record strong current account surplus and a series of rate hikes by the Bank of Russia that make investments into rouble assets more appealing.
The central bank last raised the key rate to 8.5% on Dec. 17 and indicated it was ready to increase the cost of lending further.
But concerns about Moscow’s soured ties with the West and usual investor intention to cut exposure to risky assets ahead of Christmas and New year holidays prevent the rouble from firming further.
Brent crude oil, a global benchmark for Russia’s main export, was up 1.3% at $72.43 a barrel, recovering from losses stoked by investors’ fears about the rapid spread of the Omicron coronavirus variant globally.
Russian stock indexes were up.
The dollar-denominated RTS index rose 0.6% to 1,567.5. The rouble-based MOEX Russian index was 0.4% higher at 3,684.9 points.
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