Russia moves rouble trading band for 20th time

Mar 19th, 2010 | By | Category: Rouble News

The Russian central bank shifted the rouble’s floating trading band for the 20th time in a month yesterday. Dealers said that this allowed the rouble to reach a new 14-month peak against the euro-dollar basket and the euro.

The central bank moved the floating boundary to 34.00-37.00 roubles against the euro-dollar, from 34.05-37.05, following a purchase of US$700 million.

Reuters confirmed that the rouble strengthened to 34.0238 versus the euro-dollar basket in early trading on Thursday. This took the currency to its highest level since the end of 2008. It closed the day at 34.06.

Further shifts in the Russian currency market will depend on the price of crude oil, one of Russia’s chief exports. Pyotr Neymishev, a dealer at Otkritie bank commented: “Oil rules and if it goes higher, dollar supply from non-residents will grow.”

Yesterday futures for Brent crude oil were trading in excess in $81 per barrel, close to the Wednesday’s peak.

As well as strong oil prices, the rouble is also being supported by Russian exporters who are converting foreign currency revenue into roubles to pay monthly tax bills. VAT payments are due by March 22 and the tax on natural resources must be paid by March 25.

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