August 31, 2018 / 8:46 AM / 3 months ago

Ruble up as emerging currencies try to recover

MOSCOW (Reuters) - The ruble climbed in early trade on Friday, helped by generally firm oil prices and as emerging market currencies tried to recover after the Argentinean peso’s fall the day before.

FILE PHOTO: A woman holds new 200 and 2,000 rouble banknotes in a bank in Moscow, Russia November 21, 2017. REUTERS/Maxim Shemetov/File Photo

At 0810 GMT, the ruble was 0.26 percent stronger against the dollar at 68.06 RUBUTSTN=MCX after hitting 69.01, its weakest since April 2016, last week. It also gained 0.13 percent to trade at 79.53 versus the euro EURRUBTN=MCX.

Oil prices were down, but holding near a multi-week high. Brent crude oil LCOc1, a global benchmark for Russia’s main export, was down 0.41 percent at $77.45 a barrel.

Alexei Pogorelov, chief economist for Russia and CIS at Credit Suisse, said the ruble could strengthen in September, in part because the central bank might turn more hawkish in its statement following the next key rate meeting, or even hike the rate amid the ruble’s recent volatility.

The ruble has weakened more than 9 percent from the beginning of the month due to fears of new U.S. sanctions against Russia and emerging markets jitters.

The ruble was also supported on Friday by the central bank’s decision to halt daily purchases of foreign currency for state reserves until the end of September.

However, the situation in emerging markets and fears of new U.S. sanctions on Moscow continue to weigh on the currency.

New U.S. sanctions, tied to an attack on a former Russian agent in Britain, could be imposed on Russia in the autumn.

U.S. senators have also prepared a draft bill that includes restrictions on investment in new Russian sovereign debt and bans several state-run Russian banks from operating in the United States.

“Risks of a further worsening of the external background can keep pressure on the ruble, as investors are now probably concerned about minimizing losses, not about searching for attractive investments,” said Dmitry Polevoy, chief economist at Russian Direct Investment Fund.

Russian stock indexes were down. The dollar-denominated RTS index .IRTS was down 0.32 percent to 1,072.12 points. The ruble-based MOEX Russian index .IMOEX was 0.61 percent lower at 2,316.66 points.

Reporting by Polina Nikolskaya; Additional reporting by Vladimir Abramov; Editing by Mark Potter

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