Russian rouble strengthens to near two-week high against the dollar
14/12/2023 07:33
MOSCOW, Dec 14 (Reuters) - The rouble climbed to a near
two-week high on Thursday, approaching the 89 threshold to a
weaker dollar after dovish comments from the U.S. Federal
Reserve, while the Russian market awaited an expected interest
rate hike to 16% on Friday.
The dollar was under pressure on Thursday after the Fed's
latest economic projections indicated that the interest rate
hike cycle has come to an end and lower borrowing costs are
coming in 2024.
At 0727 GMT, the rouble was 0.5% stronger against the dollar
at 89.53 RUBUTSTN=MCX , its strongest point since Dec. 1.
It had lost 0.5% to trade at 97.49 versus the euro
EURRUBTN=MCX and shed 0.1% against the yuan to 12.52
CNYRUBTOM=MCX .
Most analysts polled by Reuters expect Russia to raise
interest rates by 100 basis points to 16% on Dec. 15. Inflation
pressure exacerbated by labour shortages and lending growth is
expected to force the central bank to extend its monetary
tightening cycle to one last hike.
"We do not exclude that tomorrow the rouble may undergo a
corrective drop on the central bank's setting of a new key
rate," Alexei Antonov of Alor Broker said.
The rouble has also been supported by capital controls
forcing some exporters to convert a portion of their foreign
currency revenues into roubles. Meanwhile, pressure from the
expiry of a month-end tax period has now subsided.
The market is also likely to pay close attention to a speech
by Russian President Vladimir Putin on Thursday. Putin, who last
week said he would run again for election next year, faces
numerous economic challenges, but the West's limited success in
imposing an oil price cap is easing pressure for now.
Brent crude oil LCOc1 , a global benchmark for Russia's
main export, was up 0.6% at $74.73 a barrel.
Russian stock indexes were higher.
The dollar-denominated RTS index .IRTS was up 1% to
1,072.8 points. The rouble-based MOEX Russian index .IMOEX was
0.6% higher at 3,048.9 points.
(Reporting by Alexander Marrow
Editing by Mark Potter)
((alexander.marrow@thomsonreuters.com))