The Russian rouble strengthened against the dollar on Monday, momentarily surging to 62.71 per dollar, and soared to its best level versus the euro in over five years, helped by continued currency trading restrictions.
The rouble has been the best-performing currency in the world so far this year, despite artificial help from capital controls implemented by Russia in late February to protect its financial sector after sending tens of thousands of troops into Ukraine.
The scenario on the domestic currency market has remained unchanged for several weeks, with the rouble firming as foreign currency supply surpasses demand, according to Alfa Capital analyst Alexander Dzhioev.
Russia’s current account surplus more than tripled from January to April to $95.8 billion, according to central bank figures released on Monday. The increase was fueled by higher import receipts and a decrease in imports.
“It appears that the point of balance for the rouble rate has yet to be established,” Dzhioev remarked.
It was unclear whether President Vladimir Putin’s demand for rouble-based gas payments had boosted the currency as well.
The rouble was 1.5 percent firmer against the dollar at 63.59 at 1500 GMT, close to its highest level since early February 2020, when it hit 62.6250 on Friday.
“The current capital restriction measures have restored the rouble to pre-pandemic levels,” Rosbank analysts wrote in a note, predicting that the rouble will fall to 90 to the dollar.
“A new FX market regulation committee may change these limits in the near future, but until then, the USD/RUB consolidation may continue to the lower bound of the 63.0-70.0 range.”
The rouble surged 1.6 percent against the euro to 66.05, remaining close to its highest level since June 2017 of 64.9425, which it reached on the Moscow Exchange on Friday.
The impasse between Moscow and the West, as well as fears of fresh penalties to punish Russia for what it terms “a special military operation” in Ukraine, are in the spotlight. However, the necessity that export-oriented enterprises convert foreign currency and other constraints mitigate their influence.
“Today’s rouble firming may be minor,” Promsvyazbank analysts wrote in a note, “but the dollar rate could progressively decrease to 62.”
Russian stock indices have risen.
The RTS index, which is denominated in dollars, was up 3% at 1,165.7 points. The MOEX Russian index, which is based on the rouble, increased by 2% to 2,354.1 points.
According to Promsvyazbank, the MOEX index could approach the 2,400-2,500 range this week.
