June 10 (Reuters) – The rouble soared on Friday to its strongest level against the dollar since late May, close to multi-year peaks, after Russia’s central bank cut its key interest rate by 150 basis points to its pre-crisis level of 9.5% and Moscow eased some capital controls.
The central bank, exceeding average expectations of a 100-basis-point move in a Reuters poll earlier this week, said it would explore the scope for more cuts as inflation slows from near 20-year highs and economic contraction looms. read more
Lower rates should put some downward pressure on the rouble and support prices of OFZ treasury bonds, but the currency is still buoyed by capital controls that were imposed in the aftermath of Moscow’s decision to send tens of thousands of troops into Ukraine on Feb. 24.
She said the rouble price affected different economic actors in different ways: “Exporters are often interested in weakening the exchange rate, and importers in strengthening it.”
“Nevertheless, it is worth noting that, in combination with other factors, for example, abolishing mandatory foreign currency earnings sales by exporting companies, the currency could stop strengthening,” he said.
Analysts have credited the exchange requirement with helping to stop a dramatic slide in the value of the rouble after Western governments froze around $300 billion of the central bank’s currency reserves immediately after the start of Russia’s military campaign.
Some major Russian banks plan to charge fees on retail accounts in dollars and euros after authorities floated the idea of negative interest rates on the foreign currency deposits of corporate depositors, reducing their appeal and buttressing the rouble. read more
On stock markets, the dollar-denominated RTS index (.IRTS) was up 4% at 1,261.3 points. The rouble-based MOEX Russian index (.IMOEX) was down 0.6% at 2,281.2 points.
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