The Russian rouble firmed around 4% against the dollar and euro on Monday, heading back towards multi-year highs hit last week, supported by capital controls and an upcoming month-end tax period.
By 1050 GMT, the rouble was 4% stronger against the dollar at 57.85 , not far from 57.0750, its strongest mark since late March 2018, hit on Friday.
It had gained 4.4% to trade at 60.05 versus the euro , nearing its strongest point since June 2015 of 59.02, also reached on Friday.
The rouble has firmed about 30% against the dollar this year despite a full-scale economic crisis in Russia, making it the world’s best-performing currency – albeit artificially supported by controls imposed in late February to shield Russia’s financial sector after its decision to send tens of thousands of troops into Ukraine prompted unprecedented Western sanctions.
The rouble is being driven by export-focused companies that are obliged to convert their foreign currency revenue after the sanctions froze nearly half of Russia’s gold and forex reserves.
While the central bank and government leave restrictions in place, the rouble could continue to strengthen further in the medium term, said Tinkoff Investments analysts.
“Closer to autumn, the exchange rate may start to stabilise nearer to the 60-65 level as imports recover and restrictions are potentially lifted.”
Russian demands that foreign buyers pay for gas in roubles has also contributed to the rouble’s recent rally, analysts said last week․ The supply of foreign currency from exporters, high oil prices and an upcoming month-end tax period that usually prompts export-focused companies to convert their forex revenues into roubles to meet local liabilities are all supporting the Russian currency, said BCS Express in a note.