Russian rouble soars to strongest vs dollar since late August

Analysts polled by Reuters on Monday now expect the central bank to raise rates again on Friday, a move that could lend further support to the rouble. Also playing in the rouble's favour is the gradual increase in foreign currency sales by exporters.

The Russian rouble strengthened to a more than one-week high against the dollar on Monday, rising sharply after hitting its weakest mark since mid-August on Friday, as the market turns its attention to a central bank rate decision later this week. By 1333 GMT, the rouble was 2.1% stronger against the dollar at 96.76, its strongest point since Aug. 31, and moving away from the previous session's more than three-week low of 98.6450.

The rouble had gained 1.9% to trade at 102.86 versus the euro and had firmed 1.2% against the yuan to 13.10. Kremlin economic aide Maxim Oreshkin said the rouble's worst days were behind it.

"In the coming months, the market will receive higher volumes of foreign exchange earnings from increased prices for export goods," Interfax news agency quoted Oreshkin as saying on Monday. "Which, taking into the account the declining volumes of imports of goods and services, as well as the effects of raising the key rate and tightening macroprudential policy, will create a surplus of foreign currency in the market."

The rouble plunging to a near 17-month low in August of 101.75 to the dollar led the central bank to make an emergency 350-basis-point rate hike to 12% on Aug. 15. Analysts polled by Reuters on Monday now expect the central bank to raise rates again on Friday, a move that could lend further support to the rouble.

Also playing in the rouble's favour is the gradual increase in foreign currency sales by exporters. Brent crude oil, a global benchmark for Russia's main export, was up 0.6% at $91.25 a barrel, its highest in nearly 10 months.

Russian stock indexes were mixed. The dollar-denominated RTS index was up 1.5% to 1,027.4 points. The rouble-based MOEX Russian index was 0.7% lower at 3,121.7 points.