Russian rouble eases past 60 vs dollar, stocks edge higher

MOSCOW: The Russian rouble weakened past the 60-mark against the dollar on Friday as support from month-end tax payments faded, while stocks edged higher.

The Russian currency weakened 0.6% to 60.50 against the dollar, remaining range-bound throughout August, and fell 1.2% to 60.65 against the euro, its weakest since Aug. 18.

The rouble has been the world’s best-performing currency this year, buoyed by emergency capital controls rolled out by the central bank in a bid to halt a mass sell-off.

Its volatility has subsided after wild swings that saw it hit a record low of 121.53 to the dollar in Moscow trade in March, soon after Russia sent tens of thousands of troops into Ukraine. It then rallied to its strongest in seven years of 50.01 in June.

Volatility in the rouble may increase again, especially in early morning trading that Moscow Exchange, Russia’s largest bourse, intends to restart in September.

“The resumption of currency trading in the morning will increase liquidity. But given the reduced volumes compared to the afternoon session, it cannot be ruled out that there will be increased volatility in the additional hours,” said Maxim Biryukov, an analyst at Alfa Capital.

Analysts said month-end tax payments, which usually see Russia’s exporters converting their foreign currency earnings into roubles to pay to the treasury, had supported the rouble this week.

Russian stock indexes saw more movement, with the dollar-denominated RTS index ending the day flat at 1,183.1. The rouble-based MOEX Russian index rose 1% to 2,268.9 points.

There were few drivers of movement for either the Russian currency or stocks on Friday, Zarina Saidova, an analyst at the Moscow-based Finam brokerage said.

“Trading volumes are very low due to the holiday season. Meanwhile, the external background is not so bad - optimism prevails in the US and European markets,” she said, adding markets were largely looking for a steer from rate setters from major central banks meeting at Jackson Hole in Wyoming.

In remarks on Friday kicking off the central banking conference, US Federal Reserve Chair Jerome Powell said the US economy will need tight monetary policy “for some time” before inflation is under control. He warned of slower growth, a weaker job market and “some pain” for households and businesses.