September 6, 2017 / 9:03 AM / 6 months ago

Russian rouble firms as appetite for domestic bonds grows

MOSCOW, Sept 6 (Reuters) - The Russian rouble firmed on Wednesday, helped by interest in domestic bonds and by oil prices that maintained their level above $53 per barrel.

At 0858 GMT, the rouble was 0.24 percent stronger against the dollar at 57.38 and had gained 0.1 percent to trade at 68.50 versus the euro.

Brent crude oil, a global benchmark for Russia’s main export, was up 0.3 percent at $53.56 a barrel.

“Positive signals from oil trading floors and interest in domestic financial assets led the rouble again into the ranks of leaders among emerging market currencies”, analysts at Rosbank said in a note.

The day before, the rouble hit its strongest level against the dollar since June 14 at 57.22.

“In the current situation, the scenario of a weakening rouble still looks unlikely, because of the strength of portfolio flows and the evident frustration of speculators who made plays on a weakening rouble”, Dmitry Polevoy at ING Bank said in a research note.

Russian consumer prices fell 0.5 percent in August, the first monthly fall in six years, after rising 0.1 percent the previous month.

That helped to whet appetite for Russian domestic bonds, known as OFZs. But lower inflation also gives the Russian central bank more scope to trim its key interest rate from the current 9 percent, a prospect that could weaken the rouble.

Tensions over North Korea’s nuclear weapons programme could also influence the currency. Russian President Vladimir Putin has said it is not possible to resolve the crisis with sanctions and pressure alone.

The market awaits a European central bank policy meeting and news conference on Thursday.

Russian share indexes were down. The dollar-denominated RTS index shed 0.12 percent to 1,100 points, while the rouble-based MICEX was 0.24 percent lower at 1,999.66.

For rouble poll data see reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=RUB=

For Russian equities guide see

For Russian treasury bonds see

Russia in graphics: (Reporting by Polina Nikolskaya; Editing by Mark Trevelyan)

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