The ruble neared a one-month high as oil prices stopped falling

In the current situation, there remains a risk that the dollar-ruble pair will return to the range of 80-82.5

MOSCOW ( – The Russian ruble lifted to a one-month high in early trading Thursday after four straight sessions of gains, following a partial recovery in oil prices amid dwindling foreign currency supplies.

At 0749 GMT, the ruble strengthened 0.2 percent against the dollar to trade at 79.04, having hit 78.9025 on Wednesday (3/5/2023), its strongest since April 4.

The ruble also increased 0.4 percent to trade at 87.41 versus the euro and traded 0.4 percent stronger against the yuan at 11.41.

Read also: The Russian ruble is stable against the dollar after the decline in oil prices

The ruble strengthened sharply after the central bank kept interest rates steady on Friday (28/4/2023), but kept the prospect of a future hike on hold. The ruble also benefited from a lag from high oil prices throughout April, meaning higher export earnings for Russian exporters.

But after the month-end tax is paid on April 28, the ruble will come under pressure from the reduced supply of foreign currency in the market.

Brent crude, the global benchmark for Russia’s main export, rose 1.1 percent to trade at $73.16 a barrel.

A drop in oil prices to $73 from $80 a barrel will put pressure on the ruble and could lead to another wave of weakness, chief analyst Bogdan Zvarich said in a note.

“In the current situation, there remains a risk that the dollar-ruble pair will return to the 80-82.5 range,” said Zvarich.

Oil prices recovered on Thursday but were unable to reverse losses of more than 9.0 percent from the previous three days, as demand concerns in key consumers overruled signals that the US could halt its rate hikes.

Russian stock indexes are at around three-week lows. The dollar-denominated RTS index fell 0.1 percent to trade at 1,007.3 points. Russia’s ruble-based MOEX Index traded 0.2 percent lower at 2,527.2 points.

Russian stocks are unlikely to see serious buying interest before the long Russian weekend, said Sinara Investment Bank analysts. The country celebrates Victory Day on May 9.

Geopolitics is partly to blame for the recent plunge in Russian stocks, while investors globally fear a recession, hence Brent’s continued decline, Sinara said.

Also read: The ruble weakens as the Russian market weighs the prospects for interest rates

Translator: Apep Suhendar
Editor: Ahmad Wijaya


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