The Chicago Journal

Rouble is in an Upswing Against Euro Due to Tax Deadlines


The Russian rouble rose to its strongest on Friday. Experts say that the recent appreciation against major currencies is due to Europe getting ready for more payments on gas and capital repayments implemented by Moscow.

Russia announced on Thursday that half of the gas behemoth Gazprom’s 54 customers have opened accounts with Gazprombank as European firms approach near deadlines to pay for their gas supplies. 

Opening those accounts is attainable following EU executives enabling member states to continue purchasing Russian gas without violating multiple sanctions they have jointly implemented against Russia for what Moscow describes as its “special military operation” in Ukraine that began on February 24. 

According to Yuri Popov, a strategist at SberCIB Investment Research, a hub of Russia’s No. 1 lender Sberbank, one of the critical grounds for the rouble upturn is the shift to roubles from euros that will occur in European payments for Russian gas.

The rouble’s value against the euro rose over 5% today, reaching 61.10 at 0807 GMT in volatile trade on Moscow Exchange after staying close to 59 for most of last month – its strongest level since June 2015.

Meanwhile, against the dollar, it firmed over 4% on the day to 59.10 after touching 57.0750, a strong level not experienced since March 2018. 

The rouble’s performance is impressive. It has gone up 30% even with an economic decline in Russia, making it the best-performing currency this year, although unnatural because of those retaliation measures put into place to protect their financial state following its attack on Ukraine.

The rouble’s rise has been partially attributed to export-focused firms who convert their foreign currency profit since Western sanctions froze almost half of Russia’s gold and forex reserves.

“Exporters are forced to sell (foreign currency), and there is no one to buy it,” said a trader at an investment firm in Moscow. 

Thanks to tax preparation for next week, the rouble has been on an upswing recently. At the same time, dollar and euro demand continue to stay low because of how few imports there are now, while banks aren’t allowing people to transfer out any money either way they want outside Russia. 

“The key question is whether the central bank will step in as the excessive rouble firming is not in the finance ministry’s and budget plans,” said an analyst at CentroCreditBank, Evgeny Suvorov. 

On Friday, the head of the central bank’s monetary policy department, Kirill Tremasov, said the rouble continues to be a free-floating currency, according to the RIA news network. 

The central bank has not given any sentiment on the rouble rate.