September 28, 2018 / 3:33 PM / 3 months ago

UPDATE 1-Rouble firms on higher oil prices, short-term sanctions respite

(Adds details, updates prices)

MOSCOW, Sept 28 (Reuters) - The rouble firmed on Friday on higher oil prices and reports that the United States will not impose new sanctions on Russia, including on its debt, before November mid-term elections.

At 1513 GMT, the rouble was 0.31 percent stronger against the dollar at 65.43, against the euro it gained 0.42 percent to 76.06 as the European single currency fell on political wrangling over Italy’s budget.

The rouble felt support from high oil prices, heading away from its weakest since 2016 of 70.60 hit earlier this month amid intensified concerns about new U.S. sanctions.

Brent crude, a global benchmark for Russia’s main export, was up 1.30 percent at $82.78 a barrel.

The Russian currency has gained more than 6 percent versus the dollar in the last two weeks, helped by higher oil prices and the central bank’s decision to halt purchases of foreign currency for state reserves until the end of the year.

The market took some relief from media reports that the U.S. Congress will not handle a bill with new proposed sanctions against Russia until November.

The draft version of the bill included a ban on holdings of new Russian sovereign debt as well as restrictions for several state Russian banks on dollar transactions.

The head of the state debt department at the Finance Ministry told Reuters earlier this month he did not believe U.S. sanctions against Russia’s debt were inevitable.

“We believe that there is more room for further recovery if oil prices remain above $80 per barrel,” analysts at VTB Capital wrote, referring to the rouble.

However, the rouble lost support with the ending for the month of local tax payments which normally support the currency because exporters usually convert their foreign currency revenues into roubles to meet local tax duties in the second half each month.

It also came under pressure because of banks’ demand for dollars in the last working day of the quarter and some shortages of the U.S currency on the market, said Sergey Romanchuk, a chief trader at Metallinvestbank in Moscow.

Russian stock indexes were mixed. The dollar-denominated RTS index was up 0.16 percent at 1,189.78 points, while its rouble-based peer MOEX was 0.13 percent lower at 2,471.11 points.

For Russian equities guide see

For Russian treasury bonds see (Reporting by Polina Nikolskaya and Elena Fabrichnaya Editing by Andrey Ostroukh/Dale Hudson/Alexander Smith)

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