The rouble rallied past 52 against the dollar to a more than a seven-year high on Tuesday as capital controls. Also the month-end taxes offset the negative impact of Western statements that Russia has defaulted on its international bonds.
The rouble became the world’s best-performing currency this year, boosted by emergency measures that authorities have taken to shield Russia’s financial system. Especially from western sanctions after Moscow sent tens of thousands of troops into Ukraine. The rouble hit 50.6125 against the dollar in Moscow trade for the first time since late May 2015. It jumped to 54.40 against the euro, a level last seen in April 2015.
Now demand for foreign currency in Russia remains below supply volumes from export-focused companies. That need to convert their dollar and euro revenue to pay month-end taxes. With restrictions on forex withdrawal from banks’ accounts for individuals. Capital restrictions have helped the rouble shrug off Western statements that Russia has defaulted on its international bonds for the first time in more than a century.
The rouble’s upside could be limited given growing concerns about the impact of the strong rouble on Russia’s revenues from selling commodities abroad for foreign currency. On the stock market, the dollar-denominated RTS index (.IRTS)rose 2.5% to 1,464.1 points. The rouble-based MOEX Russian index (.IMOEX) was 0.3% lower at 2,409.1 points.