On Monday, the Russian rouble strengthened against the US dollar, rising to 62.71 per dollar and reaching its highest level versus the euro in over five years, thanks to consistent currency trading laws.
Despite Russia’s weak support from capital controls at the end of February to maintain its finance industry while deploying tens of thousands of fighters into Ukraine, the rouble has been granted the best currency performance in the country this year so far.
According to Alfa Capital Analyst Alexander Dzhioev, the situation in the local currency market has remained stagnant for several weeks, with the Rouble gaining as foreign currency supply increases their needs.
According to the statistics recorded by the Central Bank, Russia’s existing account earned extra money, even more than the Months between January and April, to $95.8 Billion. The increase was produced by more significant revenues from imports and a considerable decline in imports.
Dzhioev commented on the rouble rate, “It suggests that the point of stability for the rouble rates will be established shortly.”
It was still unclear whether President Vladimir Putin’s proposal for Rouble-based gas payments had also aided the currency’s rise.
Since the beginning of February, the rouble has gained 1.5 percent versus the dollar, trading at 63.59 at 1500 GMT, which was extremely close to achieving its top, when it rose to 62.6250 on Friday.
According to a note prepared by RosBank experts, the Rouble will be reduced to 90 to the dollar, implying that “the current control policies have returned the rouble to pre-pandemic levels.”
“These restrictions may be adjusted by the regulating committee of a new FX market in the coming years, but until then, USB/RUB convergence may be maintained at the lower limit, in the range of 63.0-70.0.”
The rouble climbed 1.6 percent versus the Euro to 66.05, the highest level since June 2017 of 64.9425, which struck the Moscow Exchange on Friday.
As a result, the importance of export-oriented businesses converting foreign currency and other limits diminish their effect. The disagreements between Moscow and the West and threats of fresh sanctions are in the spotlight.
“Today’s rouble firming may be small,” Promsvyazbank analysts wrote, “but the dollar rate may finally fall below 62.”