Rouble extends recovery gains, stocks up on 5th trading day

INTER RAO Lietuva AB

30/03/2022 09:38

March 30 (Reuters) - The rouble firmed on Wednesday,
extending a recovery and heading towards levels seen before what
Russia calls "a special operation" in Ukraine.
    Stocks inched higher on the fifth trading day after a
month-long hiatus.
    At 0720 GMT, the rouble was 1% higher at 84.30 against the
dollar  RUBUTSTN=MCX  and had touched 82.56 on the Moscow
Exchange, a level last seen on Feb. 25, the day after Russia
sent tens of thousands of troops into Ukraine.
    Against the euro, the rouble rose 0.8% to 93.36
 EURRUBTN=MCX , having briefly hit 90.73, its strongest level
since Feb. 23.
    The rouble received some support from the recent round of
Russia-Ukraine talks in Istanbul, where the Russian delegation
promised to scale down military operations around the Ukrainian
capital of Kyiv.
    The Russian currency is extending gains made last week after
President Vladimir Putin demanded that natural gas exported to
Europe or the United States be paid for in his country's
currency.
    European countries, which import about 40% of their gas from
Russia and pay mostly in euros, say state-controlled Russian gas
giant Gazprom  GAZP.MM  is not entitled to redraw contracts. The
G7 group of nations rejected Moscow's demands this week.
 urn:newsml:reuters.com:*:nL5N2VX18N
    Dynamics driving the rouble lately are to some extent
artificial. The currency, which had been free-floating until
late February, is now steered by capital controls, a ban on
buying cash dollars and euros and other administrative measures.
    The central bank started buying gold from banks at a fixed
price of 5,000 roubles per gram on Monday.  R4N2VL007 
    Taking into account current gold prices, the rouble has room
to firm to about 81 to the dollar, Otkritie Bank said in a note.
    Sberbank CIB said the rouble could continue firming until
the central bank started easing capital controls.
    On the interbank market, the rouble traded at about 86 to 87
against the dollar  RUB= . Banks offered to sell euros at 98.50
roubles and buy at 94 roubles  EURRUB= .

    VOLATILE STOCKS
    Russian stocks have moved sharply and sometimes erratically
in the past few days, after the central bank allowed the market
to end a nearly month-long pause. 
    Trading volumes are far lower than normal and non-residents
are barred from selling stocks and OFZ rouble bonds until April
1.
    London-listed internet firm VK, one of a few companies to
have flagged issues with servicing debt, saw its Moscow
depositary receipts rallying 27% on Wednesday  VKCODR.MM  after
a 72.3% leap the day before.
    Shares in Russian state energy company Inter RAO  IRAO.MM 
jumped 25% after that firm recommended paying dividends.
 urn:newsml:reuters.com:*:nS8N2UR055
    The dollar-denominated RTS index  .IRTS  rose 5.1% to 926.9
points, and the rouble-based MOEX Russian index  .IMOEX  was
3.2% higher at 2,485.7 points.
    Flag carrier Aeroflot  AFLT.MM , one of the most volatile
securities since the reopening, jumped 8.1%. Oil major Rosneft
 ROSN.MM  was 4.6% higher and dominant state lender Sberbank
 SBER.MM  gained 3.5%.

 (Reporting by Reuters; Editing by Bradley Perrett)