Russian rouble hits highest level since March 2020

Reuters: The Russian rouble briefly reached its highest level against the US dollar since March 2020 on Thursday, supported by capital controls, while stock indexes also climbed as the market watched developments around possible new sanctions against Moscow.

The volatile currency hit a high of 65.31 per dollar in early trading on the Moscow Exchange but by 0716 GMT was at 66.60, which was 0.4% lower than its Wednesday closing level.

The morning peak level had not been seen since the onset of COVID-19 pandemic.

The rouble has rallied in the past few weeks thanks to mandatory conversion of foreign currency by export-focused companies. Also, there has been weak demand for dollars and euros amid waning imports and restrictions on cross-border transactions.

Moves in the rouble are sharper than usual as market liquidity has been thinned by central bank restrictions designed to prop up financial stability after Russia sent tens of thousands of troops into Ukraine on 24 February.

Against the euro, the rouble was 0.3% stronger at 70.20, hovering at levels last seen in February 2020.

Proposals for new sanctions against Russia, including an oil embargo, were in focus as the West sought to deepen Moscow’s isolation. 

The rouble showed little reaction to the US Federal Reserve’s move to raise its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years.