Rouble stabilises in 83-84 range to the dollar, stocks down

MOSCOW: The Russian rouble stabilised within a range of 83-84 to the dollar in Moscow trade on Tuesday, while stock indexes inched down after four straight days of gains amid the continuation of what Russia calls a “special military operation” in Ukraine.

The rouble has lost steam in recent days after recovering sharply from record lows thanks to an artificial boost from capital controls and to President Vladimir Putin’s demand that European consumers of Russian natural gas pay for it in roubles.

Negotiations between Moscow and Kyiv remain in focus after Russia sent tens of thousands of troops to Ukraine on Feb. 24.

At 0729 GMT, the rouble was 0.3% stronger against the dollar at 83.73, moving towards its strongest level since Feb. 23 of 80.3325 hit on Friday.

Against the euro, the rouble gained 0.9% to 91.82 , moving further away from an all-time low of nearly 132.42 it reached in Moscow trade on March 10.

The once free-floating rouble has been steered by capital controls since late February. It has shrugged off reports about new western sanctions against Russia but analysts warned that its recovery could be temporary.

The Russian currency could lean towards 85 to the dollar without increased selling of foreign currency by export-focused companies, Promsvyazbank analysts said in a note.

The market was also scrutinising Russia’s ability to continue servicing its foreign debt. The United States stopped the Russian government from paying holders of its sovereign debt more than $600 million from reserves held at American banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of US dollars.

In the stock market, volatility has declined as some blue chips fell after days of rapid gains since the market reopened in late March following a near month-long hiatus. The dollar-denominated RTS index shed 1.5% to 1,035.4 points. The rouble-based MOEX Russian index was up 1.1% lower at 2,757.2 points after hitting its highest level since Feb. 22 of 2,835.46 on Monday.