MOSCOW: The Russian rouble soared to approach a five-month high against the dollar on Monday, supported by the promise of increased foreign currency sales by exporters, high interest rates and improving oil prices.

By 0752 GMT, the rouble was up 1.5% against the dollar at 88.62, earlier hitting 88.54, its strongest point since July 4. It had gained 1.1% to trade at 96.74 versus the euro and firmed 1.1% against the yuan to 12.33.

The rouble has recorded weekly growth for six weeks in a row against the dollar and has firmed from beyond 100 since a presidential decree requiring some exporters to convert a significant portion of FX revenue was announced last month.

This week’s rouble growth will be facilitated by upcoming month-end tax payments, which usually see exporters convert foreign currency revenues into roubles to meet domestic liabilities, said Bogdan Zvarich, chief analyst at Banki.ru.

“During the week, the rouble will try to continue its wave of recovery, as a result of which the dollar-rouble pair may move to the middle of the 85-90 range,” Zvarich said.

The Bank of Russia’s interest rate hike to 15% in late October has also buttressed the currency.

The bank has signalled that another increase may be needed before it can start lowering the cost of borrowing, but analysts broadly agree that the cycle of rate hikes is close to completion.

Russian rouble steadies near over four-month high vs dollar

“Sooner rather than later, the regulator will have to loosen the monetary policy reins and the continuing growth of money supply will put pressure on the rouble,” said Alor Broker’s Alexei Antonov.

Brent crude oil, a global benchmark for Russia’s main export, was up 0.7% at $81.15 a barrel. Russian stock indexes were mixed.

The dollar-denominated RTS index was up 1.4% to 1,137.3 points.

The rouble-based MOEX Russian index was 0.2% lower at 3,199.3 points.