Rouble strengthens as market anticipates possible capital controls
Reuters
Published Aug 17, 2023 07:18
Updated Aug 17, 2023 11:20
By Alexander Marrow and Elena Fabrichnaya
(Reuters) - The Russian rouble strengthened to 93 against the dollar on Thursday, in a volatile week filled with speculation over how the authorities might stabilise the currency after a 350-basis-point rate hike appeared to have only a limited effect.
The Bank of Russia increased its key rate to 12% on Tuesday, an emergency attempt to halt the rouble's recent slide past the symbolic 100 threshold, but analysts said more measures may be needed to return the rouble to the 80-90 range authorities have deemed acceptable.
By 1005 GMT, the rouble was 1.8% stronger against the dollar at 92.92, earlier clipping a two-week high. It had reached a near 17-month low of 101.75 against the dollar on Monday.
The rouble had gained 2% to trade at 101.07 versus the euro. It had also firmed 1.7% against the yuan to 12.69.
Authorities are discussing bringing back the compulsory sale of foreign currency revenues for exporters, five sources told Reuters. Beyond rate hikes and capital controls, Moscow has some other options, though none particularly favourable.
The Vedomosti daily late on Wednesday reported that mandated FX sales would not be reintroduced for now and that exporters had informally agreed to raise sales.
But a high-level source told Reuters an update was possible "at any moment", saying that the Vedomosti story largely focused on the government's point of view in a broad coalition holding talks.
Another source told Reuters that exporters were being told to sell as much FX as possible and provide weekly updates.
On the 25th anniversary of the rouble's 1998 devaluation, which followed rates of 150% and panic buying in shops, Russian traders were set to gather later on Thursday for 'Dealer's Fest', an event to mark the start of "a new era of the Russian financial market".
The rouble is around 15 times weaker than it was in August 1998, down from 6.3 to the dollar then to 95 now.
The Russian currency should start seeing support from exporters preparing to pay month-end taxes, for which they usually convert FX revenues into roubles.
Brent crude oil, a global benchmark for Russia's main export, was up 0.7% at $84.06 a barrel.
Get The App
Russian stock indexes were mixed.
The dollar-denominated RTS index was up 1.7% to 1,031.5 points. The rouble-based MOEX Russian index was 0.2% lower at 3,042.9 points.
Written By: Reuters
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.