Rouble Rebounds Against Dollar Amid Market Volatility

The Russian rouble rebounded against the dollar after falling for six consecutive trading sessions, driven by risks of escalation following Ukraine's attacks. The rouble gained back 1.7% to trade at 89.00 against the dollar by 1500 GMT. Trading in major currencies has shifted to the OTC market due to Western sanctions.

The Russian rouble saw a resurgence against the dollar on Wednesday after experiencing a six-day slide attributed to escalated tensions following Ukraine's significant attacks on Russian territory. By 1500 GMT, the rouble had appreciated by 1.7%, reaching a rate of 89.00 to the dollar, clawing back some of its previous 8.5% loss since Ukraine's incursion into the southern Kursk region on August 6. On Tuesday, the rouble had hit a 10-month low against the dollar.

Due to Western sanctions imposed on the Moscow Exchange and its clearing agent, the National Clearing Centre, major currency transactions have moved to the over-the-counter (OTC) market, complicating the visibility of pricing data. One-day rouble-dollar futures, which serve as a benchmark for OTC market rates, rose by 1.5% to 88.37 on Wednesday.

The Russian central bank's official exchange rate, calculated using OTC data, was set at 90.01 to the dollar for Thursday, marking a nearly 3% recovery from Wednesday's rate. Despite higher oil prices and increased daily sales of yuan by the central bank and finance ministry, the rouble has continued to weaken against the dollar and euro. The usual support from Russian exporters is absent as their tax payment sales of foreign currency are not due until later this month. Reuters reports that remaining foreign banks in Russia were the main sellers of the rouble over the past week.

(With inputs from agencies.)