Rouble recovers upward trend

Apr 20th, 2010 | By | Category: Rouble News

The rouble continued on its upward trend today, recovering the losses of Monday, as oil prices and stock values strengthened and exporters prepared to make rouble tax payments.

At 6.30am GMT, the rouble had strengthened by 8 kopecks to reach 33.67 against the euro-dollar basket, nearing the 16-month high of 33.60 that it hit last week.

A dealer at a major Western bank in Moscow commented: "The rouble is strengthening as U.S. stocks ended the day in positive territory, oil was higher and the situation around (cancelled) flights seems to be resolving slightly."

Oil prices, one of the main drivers of rouble growth, recovered today from a three-week low, due to expectations of increased demand for jet fuel as flights in Europe resume.

It appears unlikely, however, that the Russian forex market will gain sufficient momentum today to test the Russian central bank’s presumed floating intervention point of 33.60 roubles per basket.

The central bank maintains the rouble within a floating currency corridor and shifts the boundary by 5 kopecks with $700 million worth of interventions at the boundary level. It has shifted the boundary 28 times in the past two months, so that the band is currently at 33.60—36.60, according to dealers.

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