MOSCOW: The Russian rouble strengthened on Wednesday, climbing to a near two-week high against the euro as the finance ministry held OFZ treasury bond auctions for just the second time since Moscow sent tens of thousands of troops into Ukraine in February.
Geopolitical risks and unpredictability continue to buffet Russian markets. President Vladimir Putin introduced martial law on Wednesday in four Ukrainian regions he says are part of Russia.
By 1531 GMT, the rouble was up 0.6% against the euro at 60.36, earlier reaching 59.4450, its strongest point since Oct. 7.
It was 0.1% weaker against the dollar at 61.66 , earlier coming close to strengthening past the 61 threshold, and had firmed 0.5% against the yuan to 8.46 , having touched a two-week high.
The rouble is buttressed by a month-end tax period that usually sees export-focused firms convert foreign exchange revenues into roubles to pay domestic tax liabilities.
Before that period ends, it will likely be hard for the rouble to fall past 62 to the greenback, said Veles Capital analysts.
The finance ministry held its first OFZ bond auctions in several weeks, enjoying demand of 108.1 billion roubles ($1.76 billion) on two 25-billion-rouble placements. Strong demand at OFZ auctions supports the rouble.
“The demand seen at today’s auctions could serve as a sign of the relative stabilisation of the state debt market,” Raiffeisen Bank analysts said.
The first bond issued on Wednesday came with a floating-rate coupon. Promsvyazbank analysts said the ministry last placed a “floater” in November 2020.
“The external environment for the rouble-denominated bond market remains contradictory,” Promsvyazbank analysts added, pointing to improving global demand for risk assets on the back of US economic data, but with lower oil prices hampering the market.
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