Russian Rouble Strengthens to Near Two-Week High Against the Dollar

The Russian rouble climbed to a near-two-week high against the dollar on Thursday, approaching the 89 level against a weaker dollar as a result of dovish comments from the U.S. Federal Reserve. At the same time, the Russian market was anticipating an expected interest rate hike to 16% on Friday.

The dollar was feeling the squeeze on Thursday after the Federal Reserve’s most recent monetary projections showed that the loan fee climb cycle has reached a conclusion and lower getting costs are coming in 2024.

The rouble was 0.5 percent stronger against the dollar at 89.53 at 0727 GMT, its highest point since Dec. 1.

It had lost 0.5% to exchange at 97.49 versus the euro and shed 0.1% against the yuan to 12.52 .

Russia’s interest rates are expected to rise by 100 basis points to 16% on Dec. 15, according to Reuters polls of analysts. The central bank is likely to be compelled to extend its monetary tightening cycle to one final hike due to inflation pressure that is exacerbated by lending growth and labor shortages.

“We don’t reject that tomorrow the rouble might go through a restorative drop on the national bank’s setting of another key rate,” Alexei Antonov of Alor Broker said.

The rouble has likewise been upheld by capital controls constraining a few exporters to change over a part of their unfamiliar cash incomes into roubles. In the meantime, the pressure of the month-end tax period coming to an end has now subsided.

The market is likewise prone to give close consideration to a discourse by Russian President Vladimir Putin on Thursday. Putin, who last week said he would run again for political decision one year from now, faces various financial difficulties, however the West’s restricted outcome in overwhelming an oil cost cap is facilitating strain for the present.

Brent crude oil, a worldwide benchmark for Russia’s principal trade, was up 0.6% at $74.73 a barrel.

Russian stock indexes were higher.

The dollar-designated RTS list was up 1% to 1,072.8 places. The rouble-based MOEX Russian record was 0.6% higher at 3,048.9 places.