Title: Rouble firms past 63 vs dollar in Moscow, hits fresh 5-year high vs euro

May 13, 2022 04:37AM ET

By: AnalysisWatch

The Russian ruble rose above $63 in Moscow on Friday for the first time since early February 2020 and hit a new five-year high against the euro, helped by continued restrictions on currency trading.

The ruble has become the world's best-performing currency this year thanks to the artificial boost provided by capital controls Russia imposed in late February after sending tens of thousands of troops to Ukraine to protect its financial sector.

At 02:23 AM ET, the ruble was steady against the dollar at 63.32, having earlier reached 62.6250, its highest level since February 5, 2020, but banks were offering to buy rubles at much weaker levels.

Analysts at Promsvyazbank said they expected the ruble to surge early Friday but that it was likely to return to 65 per dollar by the end of the session as market participants closed positions ahead of the weekend.

The ruble lost 0.8% to settle at 65.80 against the euro, moving away from the 64.9425 level it reached in early trading. This was the highest level since mid-2017.

The ruble is being driven by export-oriented companies that need to translate their foreign exchange earnings, while demand for foreign currency is limited as imports into Russia have fallen due to disrupted logistics and extensive Western sanctions.

President Vladimir Putin on Thursday cited the ruble's rally as an example of Russia's solid performance in the face of sanctions.

Russian stock indexes fell.

The dollar-denominated RTS index fell 0.3% to 1,136.8 points, having earlier reached its highest level since February 22. The Russian ruble-denominated MOEX index was up 0.4% at 2,287.9 points.