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Title: Russian rouble falls below 62 vs dollar on Friday trade


Jun 03, 2022 04:30AM ET


By: AnalysisWatch


The Russian ruble fell below 62 against the dollar on Friday and lost over 1% against the euro as foreign demand for rubles to pay for Russian gas weakened.


At 03:57 AM ET, the ruble was 0.9% weaker against the dollar at 62.17 and 1.1% weaker against the euro at 66.29.


The ruble is now the best performing currency in the world.


New payment terms for gas supplies to EU consumers, which require foreign currencies to be exchanged for rubles, and a drop in imports have also supported the Russian currency, helping it overcome economic hurdles at home and the risks of a looming sovereign debt default.


Gazprom and the Kremlin said most gas payments were due in May, and German, Italian, and French companies agreed to use the new system, in which final settlements are made in rubles. Buyers from Denmark, the Netherlands, Bulgaria, Poland, and Finland were denied access to the market after refusing to pay under the new rules.


As a result of less activity by foreign gas buyers to exchange into rubles, the euro continued to rise against the ruble and the dollar, Promsvyazbank said in a note, suggesting that the ruble may have found a balance between supply and demand against both the euro and the U.S. dollar.


The ruble is expected to weaken slightly on Friday to stay below 62 per U.S. dollar as market participants close their short positions, the note said.


In the domestic bond market, yields on 10-year OFZ Treasury bonds fell to 9.11%, the lowest since early 2022, after Russia saw stagnant consumer prices following mild deflation the previous week.

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