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Russian rouble falls below 62 vs dollar on Friday trade
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(Reuters) – The Russian rouble fell below 62 to the dollar on Friday and lost over 1% versus the euro as foreign demand for roubles to pay for Russian gas weakened.
(Reuters) – The Russian rouble fell below 62 to the dollar on Friday and lost over 1% versus the euro as foreign demand for roubles to pay for Russian gas weakened.
At 0757 GMT, the rouble was 0.9% weaker against the dollar at 62.17 and had eased 1.1% to trade at 66.29 versus the euro.
The rouble has become the world’s best-performing currency http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html so far this year, boosted artificially by capital controls that Russia imposed after starting what it calls a “special military operation” in Ukraine on Feb. 24.
New gas payment terms for EU consumers that require conversion of foreign currencies into roubles and a fall in imports have also supported the Russian currency, helping it to shrug off economic hurdles at home and risks of a looming default on sovereign debt.
Most of the gas payments were due in May, Gazprom and Kremlin have said, and German, Italian and French companies agreed to use the new scheme where end-payments are made in roubles. Buyers from Denmark, Netherlands, Bulgaria, Poland and Finland were cut off after refusing to pay under new rules.
Following lower activity from the foreign gas buyers to exchange forex for roubles, the euro continued to rise against the rouble and the dollar, Promsvyazbank said in a note, suggesting that the rouble might have found a balance between supply and demand against both euro and the U.S. dollar.
Promsvyazbank expects the rouble to slightly weaken on Friday to remain trading below 62 per U.S. dollar as market players are closing their short positions, the note said.
On the domestic bond market, yields on 10-year OFZ treasury bonds fell to 9.11%, their lowest since early 2022, after Russia recorded flat consumer prices after modest deflation the week before.
With the consumer price index unchanged in the week to May 27, analysts suggested that the central bank may continue to cut interest rates at its next board meeting on June 10, after slashing the key rate to 11% last week.
Russian stock indexes were down. The dollar-denominated RTS index fell 1.5% to 1,178.5 points, while the rouble-based MOEX Russian index was 0.4% lower at 2,329.8 points.
(Reporting by Reuters)
The rouble is the currency of Russia, denoted by the symbol ₽. It is subdivided into kopecks and is used in all transactions within the country.
A currency exchange rate is the value of one currency for the purpose of conversion to another. It fluctuates based on market conditions.
A bond yield is the return an investor can expect to earn on a bond, expressed as a percentage of its current market price.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
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