Economy

Stocksak: Rouble gains as central banks set to end the rate-cutting cycles


© Stocksak. FILEPHOTO: The newly-designed Russian 100-rouble banknotes can been seen at Moscow’s Goznak printing facility on July 6, 2022. Moscow News Agency/Handout via REUTERS

(Stocksak). – The Russian Ruble rose in early trading on Thursday morning, just days before the central banks is due to meet to decide its rate-setting decisions.

At 0710 GMT, the rouble was 0.4% higher against the U.S. dollars at 61.51 and at 61.57 versus euro, up 0.5% over the previous day.

The currency also rose 0.3% to 8.47. Moscow is trying to improve economic relations with Beijing and reduce dependence on Western currencies. The Chinese currency has become an important indicator.

Despite a month-end tax that had supported the rouble in previous sessions now winding down the currency remained on the forefront of Friday’s central bank meeting.

According to a Stocksak poll rate-recorder, the regulator is expected keep rates at 7.5%. This will end months of large rate cuts that saw borrowing costs fall from 20% (the emergency level set days after Russia sent tens to thousands of troops into Ukraine) and the West imposing severe sanctions on Russia.

Russian stocks rose slightly on Thursday morning, after two weeks of gains exceeding 10% in the local stock exchange. The dollar-denominated RTS Index was 0.2% higher at 1,091.1 points. The MOEX Russian index, which is based on roubles, was 0.4% higher at 2129.7 point.

“The Russian market has not yet been ready for long periods or growth. According to Otkritie bank analysts, any increase in the market will soon turn into profit-taking. This was stated in a research note published on Thursday.

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