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Title: Russian rouble steadies against dollar, stocks extend slide

Jun 07, 2022 04:30AM ET

By: AnalysisWatch

The Russian ruble steadied against the dollar on Tuesday as market players assessed the impact of the latest round of Western sanctions against Moscow and investors focused on an expected central bank interest rate cut due later this week.

At 04:07 AM ET, the ruble was unchanged against the dollar at 61.04, supported by capital controls. After sharp fluctuations in May, it has stabilized in a relatively narrow range of 60.0-62.5 in recent days.

Analysts at Promsvyazbank said the currency would consolidate in a 60-62 range against the US dollar on Tuesday.

Against the euro, the ruble gained 0.6% and traded at 64.73.

On the Moscow exchange, the ruble is being driven by capital controls that Russia imposed to protect its financial system shortly after it sent tens of thousands of troops to Ukraine on February 24.

The focus remains on sanctions and Russia's efforts to meet its sovereign debt obligations.

European Union countries last week agreed to their sixth package of sanctions against Moscow over what they described as its "special military operation" in Ukraine, including a ban on imports of all Russian naval oil and petroleum products for six to eight months.

The Russian National Settlement Depository (NSD), which Moscow planned to use to service the country's Eurobonds, will suspend euro transactions after the EU put the entity on its sanctions list.

The Vedomosti daily said on Tuesday, citing its sources, that investors had not yet received Treasury payments on Eurobonds due in 2026 and 2036, which were made before a key US waiver allowing such transactions expired last month.

In the local debt market, yields on 10-year OFZ government bonds reached 8.88%, the lowest since January 13, as the market awaited the central bank's rate decision due on Friday. Bond yields move inversely to prices.

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