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Russia Ukraine conflict

Russian ruble firms to early 2020 levels near 65 vs dollar

Published: Updated:

The Russian ruble firmed on Thursday, crossing the 70 mark against the euro and heading toward 65 against the dollar as it retained artificial support from capital controls.

The ruble has become the world’s best-performing currency this year with support from capital controls that Russia imposed to shield the financial sector in late February after Moscow sent tens of thousands of troops into Ukraine.

At 1003 GMT, the ruble gained more than 2 percent to 65.58 against the dollar after briefly touching 65.0625, a level last seen in late February 2020.

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Against the euro, the ruble firmed more than 3 percent to 68.28, having earlier hit 67.85, its strongest level since January 2020.

The ruble could firm to 65 to the dollar during the day, Promsvyazbank said in a note.

The ruble is driven by export-focused companies that have to convert their foreign currency revenues, while demand for foreign exchange is limited as imports into Russia have waned amid disruption in logistics and sweeping Western sanctions.

In the longer run, the ruble may see some downside pressure mounting from an increase in imports after Russia allowed so-called parallel imports of goods, analysts say.

Last week, Moscow published a list of goods from foreign carmakers, technology companies and consumer brands that the government has included in a “parallel imports” scheme aimed at shielding consumers from business isolation by the West.

Russian stock indexes were mixed. The dollar-denominated RTS index rose 0.7 percent to 1,132.6 points. Its ruble-based peer MOEX was 1.4 percent lower at 2,354.8 points.

Shares in Russia’s second-largest oil producer Lukoil fell 1.8 percent on the day after the company said it will buy Shell’s Russian retail and lubricants businesses.

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