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Russian Ruble Weakens Against The Dollar

On Friday, the Russian ruble eased past the 60 mark against the US dollar, as support from tax payments at the end of the month faded, while stocks moved up.

Weakening in the ruble

There was a 0.6% drop in the Russian ruble against the US dollar to 60.50, as it remained bound to this range throughout the month.

It also recorded a drop of 1.2% against the euro to come down to 60.65, which is the lowest it has been since August 18th.

This year has seen the ruble get the title of the best performing currency globally, boosted by the capital controls that Moscow had implemented back in March for halting the massive sell-off.

After experiencing some wild swings, which saw the currency come down to a low of 121.53 against the greenback in March in Moscow trading, the volatility has finally subsided.

This was not long after Russia had sent its troops into Ukraine for what it calls a ‘special military operation’ back in February.

The ruble had then rallied to its strongest value of 50.01 recorded in seven years back in June.

Future predictions

It is possible that the ruble may see volatility increase once more, particularly in early morning trading. This is because the largest bourse in Russia, the Moscow Exchange will restart in September.

Market analysts said that liquidity would increase once currency trading resumes in the morning.

They said that with volumes reduced as opposed to the afternoon session, the additional hours may give volatility a boost.

According to analysts, the ruble received support this week from the month-end tax payments in which export-focused companies in Russia convert their foreign currency earnings into the local fiat.

There was more movement recorded in the Russian stock indexes, as the RTS index, which is denominated in the US dollar, ended the day flat at 1,183.1 points.

The MOEX Russian index, which is based on the ruble, saw gains of 1% that took it to a value of 2,268.9 points.

Movement drivers

Market analysts said that there were not many drivers for the Russian stocks, or currency for that matter, on Friday. They said that the holiday season meant that trading volumes were incredibly low.

However, they added that the external background was not that bad, as the European and US markets were quite optimistic.

This was because markets were mostly focused on the speeches of the rate-setters of global central banks that were attending the symposium in Jackson Hole, Wyoming.

Jerome Powell kicked off his speech on Friday at the central banking conference with remarks about a tighter monetary policy for the US economy.

The chairman of the US central bank said that they would continue to increase interest rates and would keep them high for ‘some time’ before they control inflation.

He also issued warnings of a weaker job market, slower economic growth, and ‘pain’ for businesses and households in the largest economy in the world.

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