Rouble firms towards 60 vs dollar despite eased capital controls


June 8 (Reuters) - The Russian rouble returned to gains on Wednesday, heading towards 60 per dollar, despite Russia's decision to ease some capital controls and expectations of an interest rate cut at an upcoming central bank meeting.

At 0743 GMT, the rouble was 1% stronger against the dollar at 60.45 on the Moscow Exchange RUBUTSTN=MCX. It has stabilised in the relatively narrow range of 60.0 to 62.5 in the past few days after rapid swings in May.

It firmed nearly 2% to 64.40 against the euro EURRUBTN=MCX.

The rouble is steered by capital controls that Russia imposed in February after sending tens of thousands of troops into Ukraine on Feb. 24.

After the Russian currency firmed to a near five-year high against the euro last month, Russia relaxed some capital controls.

On Tuesday, Russia allowed export-focused companies to transfer forex to their overseas accounts under certain conditions, a move seen to be aimed at helping to pay for imports and preventing the rouble from strengthening.

At the same time, the central bank raised the ceiling for cross-border transactions for individuals, saying Russian residents and non-residents from "friendly" states would be able to channel abroad the equivalent of up to $150,000 a month, up from the previous limit of $50,000.

"The rouble rate is still determined mostly by the trade balance, where the situation is not really changing: exports remain relatively high, while imports have collapsed," said Evgeny Suvorov, economist at CentroCreditBank.

The rouble may see some downside pressure from lower interest rates at home. A majority of analysts polled by Reuters expect a 100-basis-point cut to 10% as the bank tries to make lending more affordable amid sluggish consumer demand and a pause in inflation.

Sanctions and Russia's efforts to meet its sovereign debt obligations remain in focus.

European Union countries last week agreed on their sixth package of sanctions against Moscow over what it terms its "special military operation" in Ukraine, including phasing out all imports of Russian seaborne crude oil and petroleum products in six to eight months.

Russian stock indexes were up.

The dollar-denominated RTS index .IRTS rose 2.7% to 1,212.3 points. The rouble-based MOEX Russian index .IMOEX rose 1.2% to 2,320.4 points.

(Reporting by Reuters)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.