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MOSCOW: The Russian rouble strengthened in illiquid on- and offshore trade against the dollar on Friday following two weeks of hefty losses, with the central bank further restricting access to foreign currency.

At 1250 GMT, the rouble traded nearly 2% stronger against the dollar at 116.4 on the Moscow exchange while offshore trading quoted Russia’s currency at 116.29 and 130.00 to the dollar, between 6-9% up on the day.

However, the currency is down over 40% since the start of the year, by far the worst performing currency in the world and wide bid/offer spreads showed how illiquid trading had become.

“This is not a pure market so looking at the pricing it is difficult to know what the level really is,” said Rabobank currency strategist Jane Foley. “The outlook (for the rouble) is completely dependant on whether there is a place for Russian produce and energy again (in the global economy).”

Against the euro, the rouble was broadly stable at 126.00 in Moscow after hitting a record 132.4175 on Thursday.

Trading on the equity market remained largely closed on Friday by order of the central bank, which limited trading in stocks and bonds after the West rolled out economic sanctions against Russia over its invasion of Ukraine.

On Thursday, the central bank introduced restrictions on local firms’ access to foreign-currency cash for the next six months, after earlier restricting citizens’ access to hard-currency cash.

From March 10 to Sept. 10, local companies and entrepreneurs who want U.S. dollars, Japanese yen, British pounds and euros in cash can receive only up to $5,000-worth, and only to pay for overseas work trips.

The central bank on Thursday also published a survey of analysts which forecast that inflation would accelerate to 20% this year from around 10% currently and that the economy could contract as much as 8%.

Russia’s economy is facing its most severe crisis since the 1991 collapse of the Soviet Union, after the West imposed severe sanctions on almost the entire Russian financial and corporate system. Business newspaper Vedomosti reported on Friday, citing sources, that the central bank and Moscow Exchange were thinking of restarting local securities trading next week in stages. The main point of discussion was how to start trading in a way that would avoid prices collapsing, the sources told Vedomosti.

Russia is also due to repay $117 million for two coupons on external dollar-bonds on Wednesday. Whilst it has a 30 day grace period to make the payment, not doing so next week would see it edge closer towards its first major external default in around a century.

The central bank, which more than doubled interest rates in late February to 20%, is due to meet on Friday.

The rouble is down around 30% against the dollar in Moscow since Russia sent troops into Ukraine on Feb. 24, in what Russian authorities refer to as a “special operation” to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

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