LONDON: The Russian rouble rallied to its strongest levels against the euro and dollar since June 2015 and March 2018 respectively yesterday, which analysts attributed to EU countries preparing to pay Russia for gas and to capital controls imposed by Moscow.
Russia said on Thursday that half of gas giant Gazprom’s 54 clients have opened accounts at Gazprombank, as European companies approach imminent deadlines to pay for their gas supplies.
Opening such accounts became possible after EU executives allowed member states to keep buying Russian gas without breaching the slew of sanctions they have collectively imposed on Russia over what Moscow calls its “special military operation” in Ukraine that started on Feb. 24.
One of the main reasons for the rouble rally is the switch to roubles from euros that will take place in European payments for Russian gas, said Yuri Popov, a strategist at SberCIB Investment Research, a unit of Russia’s No.1 lender Sberbank .
At 11.07am, Bahrain time, the rouble had firmed more than 5 per cent to 61.10 against the euro in volatile trade on the Moscow Exchange after touching 59.02, its strongest since June 2015.
Against the dollar, it added more than 4pc on the day to 59.10 after hitting 57.0750, a level not seen since late March 2018.
The rouble has firmed around 30pc to the dollar this year despite a full-scale economic crisis in Russia, making it the best-performing currency, albeit artificially supported by controls imposed in late February to shield Russia’s financial sector after it sent tens of thousands of troops into Ukraine.
The rouble is being partly driven by export-focused companies that are obliged to convert their foreign currency revenue after Western sanctions froze nearly half of Russia’s gold and forex reserves.