May 20, 2022 04:00AM ET
By: AnalysisWatch
The ruble extended recent profits on Friday and surpassed the $60 mark for the first time since April 2018, buoyed by capital controls and domestic tax payments that usually lead to increased demand for the Russian currency.
Despite a large-scale economic crisis, the ruble has gained more than 24 percent this year and has become the best-performing currency, aided by the controls Russia imposed in late February to protect its financial sector after sending tens of thousands of troops to Ukraine.
At 03:33 a.m. ET, the ruble had risen more than 3% to 59.81 per dollar, a level last seen on April 6, 2018.
The ruble gained nearly 4% against the euro, reaching 61.90.
In fact, the ruble has remained much weaker. Sberbank, Russia's largest bank, was selling dollars in cash at 66.65 rubles and euros at 69.24 rubles.
The stronger ruble helps curb inflation and is beneficial to importers, but hurts exporters who sell goods and services abroad in exchange for foreign currency, resulting in reduced revenue for Russia's export-dependent budget.
According to analysts, Russian authorities are not interested in a substantial strengthening of the ruble from current levels and expect the once free-floating currency to weaken by the end of the year.
Demonstrating that the authorities are ready to phase out capital controls, the central bank allowed banks to sell citizens' foreign currency without restriction as of May 20, with the exception of dollars and euros.
Russian stock indexes have been mixed.
The dollar-denominated RTS index rose 2.2 percent to 1,272.7 points. Russia's ruble-based MOEX index fell 0.5 percent to 2,425.5 points under pressure from ruble appreciation.