Title: Rouble falls past 61 vs dollar as conversion of depository receipts begins

Aug 15, 2022 06:46AM ET

By: AnalysisWatch

The ruble slid past 61 to the dollar on Monday as the conversion of Russian corporate depositary receipts into local shares was underway and foreign investors from countries designated as "friendly" were able to return to the bond market.

The ruble was 1.5 percent weaker against the dollar at 61.49 at 06:29 AM ET, leaving the narrow range between 59.45 and 61.45 where it had spent nine consecutive trading sessions.

It fell 0.2% to 62.44 against the euro.

The ruble's volatility has eased recently after wild swings that saw it hit a record high of 121.53 to the dollar on the Moscow Stock Exchange in March, days after Russia sent tens of thousands of troops to Ukraine on Feb. 24, and then climb back to a seven-year high of 50.01 in June.

The ruble is expected to find support in end-of-month tax payments, which typically prompt export-oriented companies to convert some of their income into foreign currency.

On the stock markets, the dollar-denominated RTS index fell 1.4 percent to 1,100.2 points, while Russia's ruble-denominated MOEX index was flat at 2,147.6 points.

Market movements were relatively small, although analysts expect selling pressure to increase as Russia begins to convert global depositary receipts (GDRs) into shares.

In an effort to reduce foreign control over these companies in the context of Western sanctions, GDRs of Russian companies that were traded on foreign exchanges and held in Russian deposits will be converted into shares on the Moscow Stock Exchange from August 15 to August 15, 2010.

The central bank said Monday that Russian depositories, which currently hold GDRs, will write them off from holders' accounts and credit shares of Russian issuers instead. The whole process will take up to three weeks, the central bank said.