Russian rouble strengthens to over four-month high vs dollar

The Russian rouble firmed to a more than four-month high against the dollar on Thursday, supported by high interest rates and a presidential order for exporters to convert foreign currency revenues. By 1110 GMT, the rouble was 0.6% firmer against the dollar at 88.96, earlier reaching 88.5725, its strongest point since July 4.

The Russian rouble firmed to a more than four-month high against the dollar on Thursday, supported by high interest rates and a presidential order for exporters to convert foreign currency revenues.

By 1110 GMT, the rouble was 0.6% firmer against the dollar at 88.96, earlier reaching 88.5725, its strongest point since July 4. It had gained 0.6% to trade at 96.62 versus the euro and firmed 0.6% against the yuan to 12.25 .

The Russian currency has been buoyed by a presidential decree requiring some exporters to convert a significant portion of FX revenue, strengthening from beyond 100 to the dollar since the decree was announced last month. "Measures taken by the Russian authorities continue to fundamentally affect the Russian currency," said Alexei Antonov of Alor Broker, pointing to the FX decree and high interest rates.

The Bank of Russia hiked rates to 15% in late October and has signalled that another increase may be needed before it can start lowering the cost of borrowing. Antonov said the rouble could test the 85 threshold to the dollar in November. Month-end tax payments usually see exporters ramp up FX sales to meet local liabilities, supporting the rouble.

Russia's wartime economy and the rouble's weakening have fanned high inflation this year, forcing millions of Russian families to cut back on spending. Meanwhile, as Russia develops new ways to regulate foreign asset deals, Western investors in Russian companies are bracing for a new presidential decree under consideration in Moscow which they fear could force them to sell their shareholdings to the Russian government at big discounts.

Brent crude oil, a global benchmark for Russia's main export, was down 0.2% at $81.05 a barrel, pushing Russian stock indexes lower. The dollar-denominated RTS index was down 0.1% to 1,133.1 points. The rouble-based MOEX Russian index was 0.5% lower at 3,199.9 points.

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