🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Rouble recovers after hitting 8-month low vs dollar on sanctions fears

Published 29/12/2022, 07:00
© Reuters. FILE PHOTO: Rouble coin plunges into water in this illustration taken, May 23, 2022. REUTERS/Dado Ruvic/Illustration
USD/RUB
-

By Alexander Marrow

MOSCOW (Reuters) - The Russian rouble pared losses to gain on Thursday after slumping to an eight-month low against the dollar in early trade, struggling under the weight of expectations that sanctions on Russian oil and gas may limit export revenues.

Despite recovering ground in another volatile session, the rouble has still lost more than 13% to the dollar since a Western price cap on Russian oil exports came into force on Dec. 5.

By 0957 GMT, the rouble was 0.8% stronger against the dollar at 71.64, having earlier touched 72.9175, its weakest since April 27.

It gained 0.6% to trade at 75.95 against the euro and firmed 0.6% against the yuan to 10.31, earlier touching a seven-month low of 10.326.

The rouble has now lost the key support of a month-end tax period that usually sees exporters convert foreign currency revenues into roubles to pay domestic liabilities, while recovering imports have combined with falling exports to add more pressure.

"The fundamental factor in the form of the change in current account parameters, where exports have decreased and imports risen, is putting noticeable pressure on the rouble's position," said Alfa Capital in a note.

Brent crude oil, a global benchmark for Russia's main export, was down 2% at $81.6 a barrel.

President Vladimir Putin this week delivered Russia's long-awaited response to the price cap, signing a decree that bans the supply of crude oil and oil products from Feb. 1 for five months to nations that abide by it.

Russia's economy is also on shaky ground heading into 2023. November economic data on Wednesday gave signs that a labour shortage linked to Putin's late September partial mobilisation order was hurting growth prospects.

© Reuters. FILE PHOTO: Rouble coin plunges into water in this illustration taken, May 23, 2022. REUTERS/Dado Ruvic/Illustration

Russian stock indexes were higher.

The dollar-denominated RTS index was up 1% to 942.7 points. The rouble-based MOEX Russian index was 0.2% higher at 2,144.5 points.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.