Russian rouble weakens after hitting 5-year high vs euro - REUTERS
MAY 14, 2022
(Reuters) - The Russian rouble weakened on Friday after rallying past 63 per dollar in Moscow for the first time since early February 2020 and touching a near five-year high against the euro, supported by continuing restrictions on currency trading.
The rouble is the world's best-performing currency https://emea1.apps.cp.thomsonr... this year, although this is due to artificial support from capital controls Russia imposed to shield its financial sector in late February after sending tens of thousands of troops into Ukraine.
The exchange rate is mostly being driven by export-focused companies that have to convert their foreign currency revenues, while demand for forex is limited as imports into Russia have waned amid disruptions in logistics and sweeping Western sanctions.
As of 1133 GMT, the rouble had eased 1.4% to 64.17 against the dollar, after earlier touching 62.6250, its strongest mark since early February 2020.
President Vladimir Putin on Thursday cited the rouble rally as an example of Russia's sound performance under sanctions.
Against the euro, the rouble shed 2% to 66.67, moving away from 64.9425, which it touched in early trade on the Moscow Exchange. That was its strongest since June 2017.
Banks are offering to buy roubles at much weaker levels, however. Russia's No.1 lender Sberbank offered to sell dollars and euros for 72.59 and 76.41 roubles, respectively.
Promsvyazbank analysts said they expected the rouble to return towards 65 to the dollar towards the end of the session as market players close positions going into the weekend.
Despite some weakness in the rouble ahead of the weekend, levels of 55-60 roubles to the dollar look achievable in the short-term, said Dmitry Polevoy, head of investment at LockoInvest.
Russian stock indexes were mixed.
The dollar-denominated RTS index was down 1% at 1,129.0 points, earlier touching its strongest point since Feb. 22 of 1,631.11. The rouble-based MOEX Russian index rose 0.6% to 2,312.0 points.
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(Reporting by Reuters)