Russian rouble steadies as end of volatile week approaches

MOSCOW: The rouble firmed against the dollar on Friday, steadying after a volatile week that saw the Russian currency hit a more than 14-month low under pressure from geopolitical risks and limited foreign currency supply. At 1116 GMT, the rouble was 0.2 stronger against the dollar at 83.57, though still not far from its weakest point since early April 2022 of 85.03, hit on Wednesday.

It was steady at 91.56 versus the euro and 11.72 against the yuan. "The Russian currency is on the edge between a return to the devaluation trend and the development of corrective growth," Veles Capital said in a note.

Russia's deteriorating foreign trade figures, limited foreign currency supply from exporters and strong FX demand domestically are all weighing on the rouble. The Russian currency has become more thinly traded, making it susceptible to sharp swings since Moscow was targeted by Western sanctions over its military campaign in Ukraine, with fewer foreign investors able to access Russian markets.

Finance Minister Anton Siluanov on Friday said limiting volatility was key, with increased imports now affecting the exchange rate. "Our task is to make sure the exchange rate is predictable and not highly volatile," Siluanov said.

First Deputy Prime Minister Andrei Belousov, who last year said a rate of 70-80 roubles per dollar was optimal, on Thursday said 80-90 was preferable. "From my point of view, the rouble is now in a more or less comfortable zone that is optimal for the economy," Belousov said. "It is comfortable for the budget, for exporters and importers."

A trader at a major Russian bank said this week that the market was waiting for the rouble to strengthen once exporters, for whom a weak rouble is beneficial, begin to convert foreign exchange revenues to pay local taxes later in the month. Brent crude oil, a global benchmark for Russia's main export, was down 0.1% at $75.60 a barrel.

Russian stock indexes were lower. The rouble-based MOEX Russian index renewed a more than 14-month high in early trade before easing 0.3% to 2,793.0 points.

The dollar-denominated RTS index was down 0.2% to 1,052.0 points. Moscow-listed shares in tech giant Yandex fell around 3% after VTB CEO Andrei Kostin suggested Moscow take Yandex's Russian assets under temporary management.