Russian ruble firms at early 2020 levels near 65 against the dollar

One Russian ruble and one euro coins are seen next to a US one dollar banknote in this illustration taken April 6, 2022. REUTERS/Maxim Shemetov/Illusrtration

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May 12 (Reuters) – The Russian ruble strengthened on Thursday, crossing the 70 mark against the euro and heading towards 65 against the dollar, as it retained artificial support from capital controls.

The ruble has become the world’s best-performing currency this year thanks to capital controls Russia imposed to protect the financial sector in late February after Moscow sent tens of thousands of troops to Ukraine.

As of 10:03 GMT, the ruble was up more than 2% at 65.58 against the dollar after briefly touching 65.0625, a level last seen in late February 2020.

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Against the euro, the ruble strengthened more than 3% to 68.28, after hitting 67.85, its highest level since January 2020.

The ruble could strengthen to 65 to the dollar during the day, Promsvyazbank said in a note.

The ruble is being driven by export-oriented businesses that need to convert their earnings into foreign currency, while demand for foreign currency is constrained as imports into Russia have fallen due to logistics disruptions and sweeping Western sanctions.

In the longer term, the ruble could come under downward pressure from increased imports after Russia allowed so-called parallel imports of goods, analysts said.

Moscow last week released a list of products from foreign automakers, tech firms and consumer brands that the government has included in a ‘parallel imports’ program aimed at protecting consumers from corporate isolation. by the West. Read more

Russian stock indexes were mixed. The dollar-denominated RTS index (.IRTS) rose 0.7% to 1,132.6 points. Its ruble-based counterpart MOEX (.IMOEX) was down 1.4% at 2,354.8 points.

Shares of Russia’s second largest oil producer Lukoil (LKOH.MM) fell 1.8% the day after the company announced its intention to buy the Russian retail and lubricants businesses of Shell (SHEL .L). Read more

For the guide to Russian stocks, see

For Russian Treasury bonds, see

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Reuters reporting; Editing by Robert Birsel and Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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