Russian Rouble Reaches All-Time High in 2 Years Compared to Euro

Russian Rouble Reaches All-Time High Compared to Euro

Photo: Reuters

Monday saw a positive movement of the Russian rouble value, strengthening over 77 compared to the euro to an almost all-time high in two years due to this week’s tax payments that firms are expected to settle and as the market awaits the central bank rate decision on Friday. 

According to 1453 GMT, the rouble soared 3.6% to trade at 77.25 compared to the euro – standing at 76.96 – its firmest mark since June 2020. 

Against the dollar at 73.17, the rouble was 3% higher, reaching levels experienced prior to Russia’s February 24 invasion of Ukraine. 

However, trading activity still performs lower than the levels experienced prior to February 24. The rouble’s movements are influenced by capital controls implemented by the central banks due to its loss of rouble backing via FX interference following Western sanctions freezing almost half of the country’s reserves. 

Analysts say the currency was backed by a record 3 trillion roubles ($40.25 billion) that firms owe in taxes this month. To settle their accounts, a few export-focused companies must sell foreign currency. 

The tax payments may possibly thrust the rouble to even higher levels, according to a note from Veles Capital; however, an anticipated central bank rate reduction on Friday may take away hopes.

Market participants are awaiting the rate decision from the central bank since the two-emergency rate activity in the previous month – an increase to 20% in late February and a decrease to 17% on April 8. 

A poll by Reuters signaled that the bank would reduce 200 basis points to 15%. 

Another hint that the state plans to revive economic growth emerged as President Vladimir Putin suggested on Monday to cut the subsidized mortgage rate from 12% to 9%. 

Putin complimented the “timely” decision of the central bank and the government to stabilize the economic turmoil at a meeting on the economy broadcast live. 

Russia remains to be struggling with the capital battle. In March, the foreign investors’ share among holders of Russia’s OFZ treasury bonds plummeted to 17.7%, its lowest yet since late 2012, according to Monday’s central bank data.


Opinions expressed by The Chicago Journal contributors are their own.

Tina Evans

My name is Tina Evans and I am a Web Content Specialist, Blogger and travel enthusiast. I love writing about socio-cultural trends and news that dominate the blogosphere.

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