Russian Ruble Rebounds Against Dollar as Putin Mandates Ruble Settlement On Gas Exports

Updated:

The Russian ruble has recorded a significant comeback over the past three and a half days on Thursday, amid a steady recovery in global equities as short selling pressure abated. The Market focus turned to what reactions might be from Moscow demanding that its gas exports be paid for in rubles.

At press time, the ruble gained mildly against the dollar, with the USD/RUB trading at 82.02 with a decent +1.6% gain. The single currency regained a bullish outlook last week after Russian President Vladimir Putin mandated that the nation’s natural gas exports to other European countries be settled using the ruble. Reports show that this move has charged many European countries into action.

An analyst at Veles Capital noted that “investors are waiting for the resolution of the situation with ruble payments for Russian gas, and also, probably, other goods.”

Yesterday Reuter sources clarified that Russia planned on keeping the contract currency for natural gas exports to the eurozone the same but would request final payments in the ruble, a move the sources say could ease some market concerns.

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Russian Ruble Strength Artificial: Analysts

Analysts have opined that the catalysts pushing the ruble higher are somewhat “artificial.” The ruble, which was in a free-float state until late February, is being shepherded by capital controls, an embargo on the purchase of cash dollars and euros, and other administrative measures.

In the interbank market, bids for the ruble went as high as 75 against the dollar on Tuesday and hovered around 80 yesterday. The Russian currency traded at 82 to the dollar on the EBS electronic platform.

In other news, Russian stock indexes soared higher on Thursday as the nation’s central bank lifted some ban on short selling but restricted it only to shares in 83 entities and only to banks and brokers.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.