MOSCOW — The rouble touched a one-month high against the dollar in early trade on Monday before paring gains in a volatile start to the session, as oil prices fell and investors assessed the impact of the Bank of Russia’s rate cut to 7.5% on Friday.
The 50 basis-point cut had been predicted by analysts, but Governor Elvira Nabiullina suggested that the central bank’s rate-cutting cycle may be close to an end as inflationary expectations rise and omitted guidance about studying the need for future cuts.
At 0733 GMT, the rouble was steady against the dollar at 60.26, after touching 59.0025 in early trade, its strongest mark since Aug. 19.
It had lost 0.6% to trade at 60.16 versus the euro and firmed 0.2% against the yuan to 8.566 .
Brent crude oil, a global benchmark for Russia’s main export, was down 0.8% at $60.65 a barrel.
The rouble has been the world’s best-performing currency https://emea1.apps.cp.thomsonreuters.com/Apps/NewsServices/mediaProxy?apiKey=6d416f26-7b24-4f31-beb6-1b5aa0f3fafb&url=http%3A%2F%2Ffingfx.thomsonreuters.com%2Fgfx%2Frngs%2FGLOBAL-CURRENCIES-PERFORMANCE%2F0100301V041%2Findex.html this year, buoyed by emergency capital controls rolled out by the central bank in a bid to halt a mass sell-off.
“In the course of trading we expect the rouble to try and strengthen,” said Banki.ru chief analyst Bogdan Zvarich, pointing to a month-end tax period that usually sees Russia’s exporters convert their foreign currency earnings into roubles to pay to the treasury, the peak of which falls on Sept. 26.
“As a result, there will be an increased supply of foreign currency on the market, which will contribute to the rise of the rouble.”
Russian stock indexes were higher.
The dollar-denominated RTS index was up 0.5% to 1,281.3 points. The rouble-based MOEX Russian index was 0.7% higher at 2,449.2 points.
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(Reporting by Alexander Marrow, editing by Ed Osmond)