Rouble edges up on oil price surge, lockdown concerns in focus

• The rouble was up 0.4pc against the dollar at 77.01 and had gained 0.9pc to trade at 83.14 versus the euro.
• Brent crude oil, a global benchmark for Russia's main export, was up 9.7pc at $32.84 a barrel after oil prices posted their biggest-one day gains on record.

MOSCOW: The Russian rouble firmed slightly on Friday, finishing a volatile week higher thanks to a surge in oil prices on hopes of a new global deal to cut global crude supply.

At 1518 GMT, the rouble was up 0.4pc against the dollar at 77.01 and had gained 0.9pc to trade at 83.14 versus the euro.

Despite some recovery, the rouble remains one of the worst-performing currencies against the greenback so far this year and is under pressure from fears the coronavirus outbreak will send Russia's oil-dependent economy into recession.

Russia has so far reported 4,149 coronavirus cases and 34 deaths, far fewer than some major western European countries.

President Vladimir Putin has prolonged until April 30 a lockdown across the country.

Central Bank Governor Elvira Nabiullina said the economy would see the main negative impact in the second quarter.

The central bank may cut rates later this year as inflationary risks could be subdued by the effects of the pandemic, she said.

"With the central bank warning that the economy will suffer a 'temporary but substantial decline' and the rouble stabilising, monetary easing is increasingly likely. We expect 100bp (basis points) of rate cuts over the coming months," research firm Capital Economics said.

Lower rates may cushion an economic slowdown by making lending cheaper, but the Russian economy is unlikely to avoid recession, or an economic contraction for two quarters in a row, a Reuters poll showed this week.

The lockdown, during which the majority of shops and cafes are closed except for grocery stores and pharmacies, is expected to hammer small and medium-sized businesses already hit by the rouble's drop to four-year lows of nearly 82 per dollar in March.

Losses in the rouble have been limited by the central bank which last month started selling foreign exchange for the first time since 2015, in an effort to prop up the Russian currency.

Having sold more than $2 billion worth of foreign currency in March, the central bank said on Friday it would continue with the sales from state reserves on a daily basis throughout this month.

Brent crude oil, a global benchmark for Russia's main export, was up 9.7pc at $32.84 a barrel after oil prices posted their biggest-one day gains on record.

Russian stock indexes were up.

The dollar-denominated RTS index was up 1.4pc to 1,048.7 points. The rouble-based MOEX Russian index was 1pc higher at 2,571.4 points.