MOSCOW: The Russian rouble strengthened on Monday, heading towards 91 against the dollar, supported by currency controls and high interest rates as the market gears up for Russia’s final rate decision of the year this week.
The central bank is widely expected to raise borrowing costs again at its meeting on Dec. 15, by 100 basis points to 16%.
The market is also likely to pay close attention to a speech by President Vladimir Putin on Thursday.
Putin, who last week said he would run again for election next year, faces numerous economic challenges, but the West’s limited success in imposing an oil price cap is easing pressure for now.
By 0728 GMT the rouble had strengthened by 0.4% against the dollar at 91.51 and was unchanged at 98.64 versus the euro.
It had firmed 0.5% against the yuan to 12.72.
“The rouble is a bit surprising as it is not showing December’s traditional weakness,” said Alor Broker’s Alexei Antonov.
“The technical picture for the rouble has improved significantly.”
The rouble has weakened for two weeks running after the end of the month-end tax period.
It had previously registered seven weeks of gains, rebounding from more than 100 to the dollar thanks to reduced capital outflows since Putin’s October introduction of forced conversion of some foreign currency revenue by exporters.
Brent crude oil, a global benchmark for Russia’s main export, was up 0.7% at $76.38 a barrel.