Rouble firms in early Moscow trade, Russian stocks hit 2-month high

The rouble firmed towards 60 against the dollar and euro in early Moscow trade on Tuesday, while higher oil prices helped push Russia’s benchmark stock index to its highest point in two months.

At 0716 GMT, the rouble was 0.3 per cent stronger against the dollar at 60.25 and had gained 0.5 per cent to trade at 60.15 versus the euro .

“The rouble will try to continue its ascent today,” said Banki.ru chief analyst Bogdan Zvarich. “After passing the peak of tax payments, the main support for it at the moment is the improving situation in the energy market.”

The peak of a month-end tax payments period, in which Russia’s exporters usually convert foreign currency earnings into roubles, passed last week.

The rouble has spent most of August near 60 per dollar. Volatility has subsided since it hit a record low of 121.53 per dollar in Moscow trade in March, soon after Russia sent tens of thousands of troops into Ukraine. It then rallied to its strongest in seven years of 50.01 per dollar in June.

So far this year, the rouble has been the world’s best-performing currency, buoyed by emergency capital controls rolled out by the central bank in a bid to halt a mass sell-off. This helped to avoid economic meltdown that many had predicted.

“The Russian stock market should continue to head north as it is fully isolated from the Western negative,” said BCS Global Markets in a note. “The key supportive factor is the oil market – Brent should hold above $100/bbl in the short-term, though volatility would persist as bears and bulls fight for the crude market.”

Brent crude oil , a global benchmark for Russia’s main export, was up 0.4 per cent at $104.7 a barrel, near its strongest mark in a month, supporting Russian stock indexes.

The rouble-based MOEX Russian index (.IMOEX) was 0.3 per cent higher at 2,303.9 points, its strongest level since June 30.

The dollar-denominated RTS index (.IRTS) was up 0.6 per cent at 1,205.1 points.