Russian rouble pulls back from over four-month high against dollar

The Russian rouble eased away from a more than four-month high against the dollar on Friday as market players adjusted their risk going into the weekend, while still supported by exporters' foreign currency purchases and high interest rates. By 1425 GMT, the rouble was 0.5% weaker against the dollar at 89.60, pulling back from its strongest point since July 4 of 88.5725, which it hit on Thursday.

The Russian rouble eased away from a more than four-month high against the dollar on Friday as market players adjusted their risk going into the weekend, while still supported by exporters' foreign currency purchases and high interest rates.

By 1425 GMT, the rouble was 0.5% weaker against the dollar at 89.60, pulling back from its strongest point since July 4 of 88.5725, which it hit on Thursday. It had lost 0.1% to trade at 97.34 versus the euro and shed 1% against the yuan to 12.39 .

The pace of rouble appreciation and trading turnover on the FX market fell on Thursday, said Alor Broker's Alexei Antonov, suggesting that the rouble could weaken back towards 90 to the dollar should negative factors emerge. "However, from the middle of next week, the supply of dollars and yuan may significantly grow due to the approaching peak of the tax period," Antonov said in a note.

Month-end tax payments usually see exporters ramp up FX sales to meet local liabilities. 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.

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. 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.

Brent crude oil, a global benchmark for Russia's main export, was up 1.9% at $78.87 a barrel, having slumped to an over four-month low in the previous session. "The deterioration of the situation in oil prices will have an impact," said Banki.ru Chief Analyst Bogdan Zvarich. "This factor, as a minimum, will restrain the rouble's further strengthening."

Oil market weakness is among the factors that may see investors lock in profits in some currency pairs before the weekend, said Yevgeny Loktyukhov of Promsvyazbank. Russian stock indexes were mixed.

The dollar-denominated RTS index was down 0.4% to 1.124.6 points. The rouble-based MOEX Russian index was 0.3% higher at 3,199.0 points.