(Reuters) – The Russian rouble firmed on Thursday, reaching the 70 mark versus the euro and moving towards 65 against the dollar as it held artificial support from capital restrictions.
The rouble has become the world’s best-performing currency http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html this year with help from capital restrictions that Russia implemented to defend the banking sector in late February after Moscow moved tens of thousands of soldiers into Ukraine.
At 1003 GMT, the rouble climbed more than 2 percent to 65.58 versus the dollar after briefly topping 65.0625, a level last seen in late February 2020.
Against the euro, the rouble firmed more than 3 percent to 68.28 , having previously achieved 67.85, its best level since January 2020.
The rouble might strengthen to 65 to the dollar throughout the day, Promsvyazbank stated in a note.
The rouble is pushed by export-focused enterprises that have to convert their foreign currency income, while demand for foreign currencies is constrained as imports into Russia have decreased despite disruption in logistics and broad Western sanctions.
In the longer term, the rouble may see some negative pressure coming from an increase in imports after Russia approved so-called parallel imports of products, economists believe.
Last week, Moscow unveiled a list of items from international carmakers, technology businesses and consumer brands that the government has included in a “parallel imports” plan intended at insulating consumers from commercial isolation by the West.
Russian stock indices were mixed. The dollar-denominated RTS index increased 0.7 percent to 1,132.6 points. Its rouble-based counterpart MOEX was 1.4 percent down at 2,354.8 points.
Shares in Russia’s second-largest oil producer Lukoil slid 1.8 percent on the day after the firm announced it would purchase Shell (LON:RDSaRussian )’s retail and lubricants operations.
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