Russian rouble tumbles to 3-week low, Rusal shares leap on merger talk (updated)

En+ MKPAO

05/07/2022 10:33

* Russian rouble slides past 58 vs dollar to 3-week low
    * Rouble nears 60 vs euro, also hitting 3-week low
    * Rusal shares jump on merger talk with Nornickel
    * This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine

 (Updates prices, adds Moscow Exchange, bullets)
    MOSCOW, July 5 (Reuters) - The rouble tumbled to a
three-week low on Tuesday, sliding past 58 to the dollar, while
shares in aluminium producer Rusal leapt as Russian businessman
Vladimir Potanin hinted at a possible merger with mining giant
Nornickel.
    Investors were looking for clues on when Russia may
intervene in the currency market, something Finance Minister
Anton Siluanov said Russia could turn to as it tries to keep a
lid on the rouble's strengthening.
    The central bank did not immediately respond to a request
for comment on what caused the rouble's sharp drop on Tuesday. 
    The finance ministry said it did not plan to use extra
budget revenues to buy foreign currency or gold, as it eyed
increased budget revenues this month thanks to higher oil
prices.  urn:newsml:reuters.com:*:nR4N2X500O
    By 0904 GMT, the rouble was 5.4% weaker against the dollar
at 58.18  RUBUTSTN=MCX , its weakest point since June 14. The
unit had lost 3.5% to trade at 59.77 versus the euro
 EURRUBTN=MCX , earlier slipping to a three-week low of 59.95.  
 
    The rouble's recent slump from more than seven-year highs
hit last Wednesday is just a correction on the market, said Alor
Broker in a note.
    "It is too early to talk about a break in the rouble's
strengthening trend," Alor Broker analysts wrote. "Russia's
balance of payments will continue to remain very strong,
importers will not recover their positions quickly. 
    "Only by introducing a new budget rule can the situation on
Moscow Exchange's currency market change radically." 
    The rouble is still the world's best-performing currency https://emea1.apps.cp.thomsonreuters.com/Apps/NewsServices/mediaProxy?apiKey=6d416f26-7b24-4f31-beb6-1b5aa0f3fafb&url=http%3A%2F%2Ffingfx.thomsonreuters.com%2Fgfx%2Frngs%2FGLOBAL-CURRENCIES-PERFORMANCE%2F0100301V041%2Findex.html
 this year, boosted by measures - including restrictions on
Russian households withdrawing foreign currency savings - taken
to shield Russia's financial system from Western sanctions
imposed after Moscow sent troops into Ukraine on Feb. 24. 
    Proceeds from commodity exports and a sharp drop in imports
are further factors behind the currency's gains. But the rouble
has now lost the support of last week's tax-driven dollar and
euro sales.
    Expectations of the imminent launch of currency
interventions may continue to pull support from the rouble on
Tuesday, said Promsvyazbank analysts. 
       
    METALS MERGER
    Potanin, the largest shareholder at Nornickel  GMKN.MM ,
said he was ready to discuss a possible merger of the mining
giant with Rusal  0486.HK , in part as a defence against Western
sanctions.  urn:newsml:reuters.com:*:nL1N2YM0B9
    Rusal's Moscow-listed shares  RUAL.MM  leapt more than 20%
before settling around 4% higher. Shares in En+  ENPG.MM ,
Rusal's majority shareholder, were 8.2% higher in Moscow.
Nornickel shares fell 5.7%. 
    Russian stock indexes were lower.
    The dollar-denominated RTS index  .IRTS  was down 4.9% to
1,188.0 points. The rouble-based MOEX Russian index  .IMOEX  was
0.5% lower at 2,194.0 points.
    Moscow Exchange said it would resume evening trading on the
derivatives market from July 12 due to high demand from clients,
having introduced a raft of restrictions soon after Russia began
what it called a "special military operation".  urn:newsml:reuters.com:*:nL8N2YM1VD


 (Reporting by Reuters)