Russian rouble rebounds past 74 to the dollar as oil prices rise

The rouble was 1.1pc stronger against the dollar at 73.97, after losing more than 2pc in the previous trading sessi
16 Apr, 2020
  • The rouble was 1.1pc stronger against the dollar at 73.97, after losing more than 2pc in the previous trading session, and had gained 1.4pc to trade at 80.50 versus the euro.
  • Brent crude oil, a global benchmark for Russia's main export, was up 3.8pc at $28.7 a barrel.

Tumbling retail sales and sinking factory output were just some of the negative economic indicators from the United States on Wednesday that pushed investors to seek safe havens, such as the dollar, harming the rouble.

But the Russian market rebounded on Thursday, with the rouble boosted in part by rising oil prices, which edged away from a two-week low hit on Wednesday.

By 1203 GMT, the rouble was 1.1pc stronger against the dollar at 73.97, after losing more than 2pc in the previous trading session, and had gained 1.4pc to trade at 80.50 versus the euro.

Brent crude oil, a global benchmark for Russia's main export, was up 3.8pc at $28.7 a barrel.

Strengthening metals prices and the mild recovery in oil prices supported the rouble, said John Walsh, an equity strategist with Alfa Bank.

President Vladimir Putin on Wednesday unveiled a raft of new economic measures aimed at supporting small businesses and regional governments in coping with the coronavirus outbreak in Russia.

Many parts of the country, including the Moscow region, have adopted lockdown measures which will remain in place at least until the end of April, forcing businesses to close.

Russia has so far recorded 27,938 cases and 232 coronavirus-related deaths.

Despite the rouble's sharp fall, Russia's finance ministry pushed ahead with holding two auctions of OFZ treasury bonds on Wednesday, with demand supported by expectations that the central bank could cut its key rate as soon as April 24.

Central bank data showed that major Russian banks and foreign investors could help Moscow raise funds to finance its response to the coronavirus outbreak.

"Operations by the central bank and finance ministry continue to keep the rouble rate below 75 to the dollar, while the potential for the Russian currency to strengthen remains limited until the situation on oil markets is resolved," Bank St Petersburg analysts said in a note.

Russian stock market indexes were up, having sustained heavy losses on Wednesday.

The dollar-denominated RTS index was up 3.5pc to 1,083.1 points. The rouble-based MOEX Russian index was 1.8pc higher at 2,543.4 points.

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