Rouble continues to pull back from lows

The Russian rouble firmed on Friday despite an announcement that new US sanctions would take effect on Monday, pulling back from its lowest levels since 2016 as the market priced in a pause in the central bank's purchases of foreign currency. The rouble has lost nearly 8 percent against the dollar so far this month, and more than 0.5 percent this week, battered by threats of new US sanctions against Moscow and jitters in other emerging markets, particularly in Turkey.
The rouble's slide to more than two-year lows this week prompted the central bank to suspend its daily buying of foreign currency for state reserves, which lifted pressure off the already battered rouble. The decision has helped the Russian currency claw back some losses. As of 1442 GMT, the rouble was 0.9 percent stronger at 67.59 versus the dollar, heading away from its weakest level since early April 2016 of 69.01, touched on Thursday.
The rouble was also being supported by local month-end tax payments. To meet these, export-focused companies convert their dollar revenues. The central bank decision's to halt daily purchases of foreign currency, which in the past few days have stood at around $300 million a day, would stabilise liquidity at current levels, analysts at Raiffeisen said.
"External debt payments, capital outflow because of sanctions fears, and a growth in imports limits a significant recovery," analysts said, adding that the rouble was unlikely to drop below 66 to the dollar because of sanction risks. On Monday, US sanctions against Russia in response to a nerve agent attack in Britain, announced earlier this month, will take effect. A second batch of penalties will be imposed after 90 days unless Russia gives a "reliable assurance" it will no longer use chemical weapons, something it denies doing.
Versus the euro, the rouble was 0.42 percent firmer at 78.40, a long way from levels of around 73 seen before the massive sell-off that started in early August. Russian stock indexes were higher as prices were higher for oil, Russia's key export. Brent crude futures were 2.01 percent up at $76.22 per barrel. The dollar-denominated RTS index was up 1.37 percent to 1,058.25 points, while the rouble-based MOEX gained 0.37 percent to 2,268.22 points.