MOSCOW, Nov 23 (Reuters) – The Russian rouble strengthened on Thursday, heading back towards a near five-month high hit earlier this week, helped by month-end tax payments, exporters’ forced foreign currency sales and high interest rates.
At 0718 GMT, the rouble was 0.4% stronger against the dollar at 88.00, heading back towards 87.6550, its strongest point since June 30, hit on Tuesday.
It was unchanged against the euro and yuan at 96.03 and 12.30 respectively.
Month-end tax payments, which usually see exporters convert foreign currency revenues into roubles to meet domestic liabilities, are likely to support the rouble this week.
The rouble could reach 85 to the dollar at the peak of that tax period, said Alor Broker’s Alexei Antonov.
“Trading dynamics in late November-early December, when the tax period ends, will tell us a lot about the future moods of the currency market,” Antonov said.
The rouble is on course for a weekly gain for the seventh week in a row against the dollar and has firmed from beyond 100 since a presidential decree requiring some exporters to convert a significant portion of foreign exchange revenue was announced last month.
Kremlin aide Maxim Oreshkin on Wednesday said the reduction in capital outflows had helped the rouble recover, along with a stabilising balance of payments. Strong consumer demand may limit a further rise in the rouble, he said.
The Bank of Russia’s interest rate hike to 15% in late October has also buttressed the currency. The bank has signalled that another increase may be needed before it can start lowering the cost of borrowing, but analysts broadly agree that the cycle of rate hikes is close to completion.
Brent crude oil, a global benchmark for Russia’s main export, was down 1.1% at $81.10 a barrel, under pressure after OPEC+ delayed a ministerial meeting expected to discuss oil output cuts to Nov. 30 from Nov. 26 as producers struggled to agree on production levels and hence possible reductions.
Russian stock indexes were higher.
The dollar-denominated RTS index was up 0.4% to 1,156.9 points. The rouble-based MOEX Russian index was 0.1% higher at 3,233.2 points. (Reporting by Reuters Writing by Alexander Marrow Editing by Mark Potter)
