Rouble recovers from steep losses, stocks up

Updated 15 Nov, 2021

MOSCOW: The Russian rouble firmed on Monday, recovering from a steep drop on Friday that was driven by concerns over tensions between Russia and Ukraine that also hit bonds and stocks.

At 0720 GMT, the rouble was 0.6% stronger against the dollar at 72.45. On Friday, it had hit 72.9775, its weakest since Oct. 4 apart from a seconds-long drop on the Moscow Exchange on Oct. 22 that was likely caused by a trading error.

Versus the euro, the rouble gained 0.4% to 82.97 .

The sharp decline in the rouble last week was triggered by a Bloomberg report saying that U.S. officials had told EU counterparts about concerns over possible Russian military intervention in Ukraine, analysts said.

The Russian troop movements near the Ukrainian border have spurred fears of a possible attack. But Moscow has dismissed such suggestions as inflammatory and complained about increasing activity in the region by the NATO transatlantic alliance.

President Vladimir Putin said in an interview broadcast on Sunday that he had rejected a defence ministry proposal to hold snap Black Sea military drills in response to NATO activity because he did not want to escalate tensions in the region.

Rouble hits 15-month high vs dollar before central bank rate decision

"The rouble looks oversold from the technical point of view, so we expect a gradual return of the dollar-rouble pair to 72," Promsvyazbank said in a note.

If geopolitical risks subside, the rouble should firm beyond the 72 mark against the dollar, Alor Brokerage said.

The rouble is set to receive support from month-end taxes that usually prompt export-focused companies to convert their dollar or euro revenues to roubles to meet local liabilities.

The rouble's high-yielding appeal also remains in place. The central bank is expected to raise its key interest rate for the seventh time this year at the Dec. 17 board meeting, to 8% .

Russian stock indexes were up after Friday's losses.

The dollar-denominated RTS index was up 0.6% to 1,794.2 points. The rouble-based MOEX Russian index was 0.1% higher at 4,124.9 points.

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