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Title: Russian rouble firms to early 2020 levels near 65 vs dollar


May 12, 2022 06:36AM ET


By: AnalysisWatch


The Russian ruble gained on Thursday, breaching 70 versus the euro and pushing towards 65 versus the dollar, as it was supported artificially by capital controls.


At 06:03 AM ET, the ruble had gained more than 2% versus the dollar to 65.58 after briefly touching 65.0625, a level most recently seen in late February 2020.


Against the euro, the ruble strengthened more than 3% to 68.28 after earlier touching 67.85, the highest level since January 2020.


Later in the day, the ruble could gain to 65 against the dollar, Promsvyazbank said in a note.


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


In the longer term, the ruble could come under strain due to a sharp rise in imports after Russia allowed so-called parallel imports of goods, analysts say.


Last week, Moscow released a list of goods from foreign carmakers, technology companies and consumer brands that the government has placed under a "parallel import" system designed to protect consumers from economic insulation from the West.


Russian stock indices were mixed. The RTS dollar index rose 0.7% to 1 132.6 points. Its ruble counterpart, the MOEX, was 1.4% lower at 2,354.8 points.


The stock of Russia's second-largest oil producer, Lukoil, dropped 1.8% after the company said it would take over Shell's Russian retail and lubricants business.


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