Rouble steadies near 60 vs dollar, stocks down

The rouble eased on Wednesday but still traded near 60 against the dollar as it retained some support from month-end tax payments that prompt export-focused firms to step up conversion of foreign currency, while stock indexes inched lower.

At 0737 GMT, the rouble was 0.3% weaker against the dollar at 60.10 and eased 0.2% to 59.69 to the euro . “The dollar-rouble pair has been in a relatively narrow 57-61 range for almost a month and a half. The rouble has stopped strengthening and the pair seems to have momentarily reached a supply and demand equilibrium,” said Mikhail Biryukov, chief analyst at Alfa Capital.

Year-to-date, the rouble has become the world’s best-performing currency as a result of capital controls that Russia imposed after beginning what it calls “a special military operation” in Ukraine on Feb. 24. Rouble volatility has subsided after wild swings that saw it hit a record low of 121.53 to the dollar on the Moscow Exchange in March and then rally to a seven-year peak of 50.01 in June.

Russia’s economy has avoided the meltdown many predicted after Moscow sent its forces into Ukraine six months ago, with higher prices for its oil exports cushioning the impact of Western sanctions, but hardships are emerging for some Russians. On the stock market, the dollar-denominated RTS index shed 0.9% to 1,179.5 points. The rouble-based MOEX Russian index was 0.5% lower at 2,248.8 points.

The market will pare some of its heavy 2022 losses by the end of the year and the MOEX index will climb to 2,500 points, a Reuters poll showed on Wednesday. To reach the level, the index needs to break through a technical resistance level of 2,270 points, Sinara Investment Bank said.

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