Russian rouble recovers from over 5-week low vs dollar (updated)

Polymetal International PK

05/06/2023 14:25

(Updates prices, adds detail on FX sales, rates, Polymetal)
       June 5 (Reuters) - The Russian rouble slightly extended
a recovery from a more than five-week low against the dollar on
Monday, supported by higher oil prices and companies' dividend
plans as the country said it had repelled an offensive by
Ukrainian forces.
    By 1311 GMT, the rouble was 0.5% stronger against the dollar
at 81.13  RUBUTSTN=MCX , having hit 81.92 in early trade, its
lowest since April 27. It had gained 0.8% to trade at 86.74
versus the euro  EURRUBTN=MCX  and firmed 0.9% against the yuan
to 11.38  CNYRUBTOM=MCX .
    Russia said on Monday its forces had thwarted a major
Ukrainian offensive at five points along the front in the
Ukrainian region of Donetsk and killed hundreds of troops, while
Kyiv accused Moscow of spreading lies.
    While geopolitical risk remained a drag on the rouble, the
currency was buoyed by other factors.    
    FX sales by Russian firms including oil major Lukoil
 LKOH.MM , which is accumulating cash for dividend payments,
should buttress the rouble. 
    "For the week we will likely see the dollar-rouble pair go
below the 80 mark," said Promsvyazbank analyst Egor Zhilnikov.
"The main support for the rouble could come from Lukoil's market
activity on the backdrop of the company's dividend payments."
    The rouble should also gain some support after the finance
ministry said it would almost double its foreign currency sales
in the coming month. 
    The market is also looking ahead to Friday, when the central
bank is widely expected to keep rates on hold at 7.5%.
    Brent crude oil  LCOc1 , a global benchmark for Russia's
main export, was up 2.1% at $77.75 a barrel, rising after Saudi
Arabia pledged a deep cut to its output in July on top of a
broader OPEC+ deal to limit supply into 2024.
    Russian stock indexes also moved higher.
    The dollar-denominated RTS index  .IRTS  was up 0.2% at
1,053.5 points. The rouble-based MOEX Russian index  .IMOEX  was
0.2% higher at 2,723.5 points.
    London-listed shares in gold and silver producer Polymetal
 POLYP.L  were 2.6% lower after the company said it was
considering divesting its Russian operations after they were
targeted by U.S. sanctions.

 (Reporting by Alexander Marrow; Editing by Sriraj Kalluvila)
 ((alexander.marrow@thomsonreuters.com))