Russian rouble takes a joyride before coming back down to earth

Russian Ruble Fails to Sustain Gains, Drops After Hitting 3-Month Peak

Rouble’s Roller Coaster Ride: Volatility Strikes Back

Moscow, Oct 31 (ANBLE) – Brace yourselves for a wild ride on the Russian rouble roller coaster! In a fierce and volatile session, the rouble reached a three-month high above 92 to the dollar, only to weaken later. Talk about high interest rates supporting the rouble, but don’t forget the month-end reduction in foreign currency sales!

By 1324 GMT, the rouble was back at 93.28 against the dollar, 0.5% weaker. Earlier, it bravely strengthened to 91.6225, its highest point since Aug. 1. Meanwhile, it lost 0.3% against the euro, trading at a modest 98.90, and 0.5% against the yuan, sliding to 12.70.

The Bank of Russia didn’t mince its words when it hiked interest rates by a staggering 200 basis points to 15%. Clearly, they mean business! Borrowing costs are skyrocketing, aiming to tackle the weak rouble, persistent inflation, and surging budget spending.

It seems this rate hike has put a dent in consumer demand, as well as exporters’ requests for dollars and yuan. Alor Broker’s very own Alexei Antonov says, “But at the same time, growth in the money supply is continuing and this will definitely result in rouble weakening.” Will it? Won’t it? The suspense is killing us!

But fear not, for President Vladimir Putin is here to save the day! His decree on mandatory FX sales, which came into effect this month, is like a knight in shining armor for the rouble. The decree requires 43 groups of exporters to repatriate 80% of their FX revenue and then sell 90% of that sum. Hail to the decree! Since its announcement, the rouble has climbed from beyond 100 to the dollar.

In a surprising twist, The Financial Times spills the tea on Russia imposing “effective” capital controls on Western companies selling their operations in the country. With caps and deadlines on foreign currency transactions, these moves would undoubtedly favor the rouble. Capital controls are in, folks!

• Green NIMBYism Turning Angry Neighbors into Environmental Allies – ...
• Bank of Nova Scotia Selling Stake in Canadian Tire: Capital Boost a...
• Amgen’s Sales Rise! But Shares Play Hard to Get as Investors ...

Amidst all this chaos, Brent crude oil, the golden ticket for Russia’s exports, is up 0.7% at $88.02 per barrel. Talk about a glimmer of hope!

But wait, let’s not forget about the stock market. Russian stock indexes are having a rough day. The dollar-denominated RTS index is down 1.4%, testing investors’ nerves at 1,079.1 points. And the rouble-based MOEX Russian index is 1% lower, dancing at 3,195.7 points. It’s truly a wild ride!

Phew, what a news-filled roller coaster ride! Hang on tight, dear readers. The Russian rouble is proving to be quite the daredevil lately. Will it continue to defy gravity or succumb to the forces of volatility? Only time will tell!

Our Standards: The Thomson ANBLE Trust Principles. Read more

• BACT
• BIZ
• CBRU
• CEN
• CMPNY
• DBT
• DEAL1
• DRV
• ECO
• FRX
• GEN
• GFIN
• INT
• MKTREP
• REP