On Monday, the Russian ruble moved to 60 against the US dollar, as it received support from month-end tax payments, which increase the demand for the Russian currency.
As for Russian stocks, they also clipped a high of two months on the day.
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There was a 0.5% gain in the Russian currency at 1317 GMT to reach 60.19 against the US dollar. When the market first opened, the ruble had been swinging wildly.
However, it eventually went up by 0.8% to reach 60.17 against the euro. For most of August, the ruble has been close to the 60 mark against the dollar.
This is because the volatility in the currency has eased down significantly after it had reached a record low of 121.53 against the greenback back in March in Moscow trading.
This was soon after Russia had invaded Ukraine. The ruble had then recorded a rally that had allowed it to reach 50.01 in June, which is the strongest it has been in seven years.
According to currency analysts, the Russian currency is expected to move towards 61 against the dollar, as the Nord Stream 1 gas pipeline that goes to Europe is under maintenance.
The gas issue
The gas flows from Russia to Europe via the Nord Stream 1 pipeline have already been slashed to 20% capacity.
In addition, they are planning on shutting the supply down entirely in the next week for three days, stating that the turbines need some repair work.
The European Union has accused Russia of using gas as a way to retaliate against the Western sanctions that have been imposed on the country due to its invasion of Ukraine.
Market analysts said that the Russian currency does not have a significant reaction to the complete shutdown of the Nord Stream 1 pipeline.
They said that the surplus of the current account is so substantial that even this issue does not really have an impact on the situation.
The current account surplus of Russia, which is the difference between its imports and exports, has almost tripled this year so far to a whopping $166.6 billion
This is because imports plunged due to Western sanctions, while revenues soared. On Monday, Andrei Belousov, the First Deputy Prime Minister, said that the economic contraction may be more than predictions.
Initially, the government had predicted a 2% economic contraction and now they believe it would be around 12%.
There is a possibility that the ruble’s volatility may increase once more. From Monday onwards, the Moscow Exchange was scheduled to stop accepting dollars for underwriting transactions.
In addition, early morning trading will also begin in September. In addition, the FX restrictions imposed on banks have also been lifted by the Russian central bank.
There was a rise in Russian stock indexes. There was a 0.9% rise in the MOEX Russian index based on the ruble, as it touched its highest level since June 30th.
A 1.2% rise was also recorded in the RTS index, which is denominated in the dollar, to reach 1,197.0 points.
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