Ruble stabilizes, stocks fall ahead of return of some foreign investors

Newly designed Russian 100 ruble banknotes are seen at the Goznak printing plant in Moscow, Russia July 6, 2022. Moscow News Agency/Handout via REUTERS

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  • This content was produced in Russia where the law limits coverage of Russian military operations in Ukraine

MOSCOW, Aug 5 (Reuters) – The Russian ruble stabilized in the 60-61 range against the dollar on Friday, missing important growth drivers ahead of the weekend, as stocks fell as the market prepared for a partial return of foreign investors.

At 12:54 GMT, the ruble was little changed over the day at 60.41 against the dollar and had gained 0.4% to trade at 61.27 against the euro.

“Ruble volatility remains low…We expect the ruble to hold 60-61 against the dollar today,” SberCIB Investment Research said in a note.

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The ruble is the best-performing currency in the world so far this year, having received an artificial boost from capital controls imposed by Russia after sending tens of thousands of troops to Ukraine on February 24.

The strong ruble has helped limit nascent inflation and opened the door to central bank rate cuts, but is hurting fiscal revenues and export-focused businesses that depend on selling commodities to the EU. foreign.

“The ruble is ignoring the drop in oil for now, but that won’t last long as a decline in foreign currency inflows into the country will follow lower oil prices,” Alor Broker said in a note.

Brent crude, a global benchmark for Russia’s top export, rose 0.7% to $94.8 a barrel. It hit a more than five-month low in the previous session.

In the stock market, the dollar-denominated RTS index (.IRTS) fell 3% to 1,071.8 points, while the Russian ruble-based MOEX index (.IMOEX) fell 2.9% at 2,054.8 points.

“No growth drivers are seen in the near term, while pre-weekend profit taking and generally weaker activity could compound the decline,” BCS said.

Russian stocks are set to fall in August as investors from so-called “friendly” countries, a fraction of foreign investment power, return to uncharted waters in a stock market now offering huge risks and insufficient transparency. Read more

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Reuters reporting; Editing by Kim Coghill and Emelia Sithole-Matarise

Our standards: The Thomson Reuters Trust Principles.

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