Russian rouble climbs on eve of rate decision

Credit: REUTERS/MAXIM SHEMETOV

By 1035 GMT, the rouble was 0.8% stronger against the dollar at 91.54 RUBUTSTN=MCX and had gained 0.3% to trade at 99.96 versus the euro EURRUBTN=MCX. It had firmed 0.9% against the yuan to 12.69 CNYRUBTOM=MCX.

President Vladimir Putin secured a landslide election victory last week, extending his rule by a further six years. His win was condemned as unfair and undemocratic by Western governments, but he was congratulated by China, India, North Korea and others.

The Russian market's focus has now turned to the central bank. All 24 analysts polled by Reuters expect borrowing costs to remain unchanged on Friday, but some have said there is a slight chance of a hike.

Ahead of the decision, the rouble is being buttressed by oil prices, which hit their highest since early November this week, and month-end tax payments that usually see exporters convert foreign currency revenues to meet domestic liabilities.

"The positive dynamics in oil prices and the increased supply of foreign currency from exporters, who are preparing for next week's tax payments, will support the rouble and contribute to its strengthening," Banki.ru chief analyst Bogdan Zvarich said.

Brent crude oil LCOc1, a global benchmark for Russia's main export, was down 0.2% at $85.78 a barrel.

Russian stock indexes were higher.

The dollar-denominated RTS index .IRTS was up 1.4% to 1,129.2 points. The rouble-based MOEX Russian index .IMOEX was 0.4% higher at 3,280.2 points.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

(Reporting by Alexander Marrow; Editing by Jacqueline Wong and Alison Williams)

((alexander.marrow@thomsonreuters.com))

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

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