Ruble Hits One-year High against Euro

A jump in oil prices and local month-end taxes that boost demand for the ruble led the Russian currency to its highest level against the euro since last April on Monday, Reuters reported.

The ruble also hit a one month-peak versus the dollar on Monday, the news agency’s report said.

At 0723 GMT, the ruble had gained 0.5 percent to 71.71 against the euro, after briefly hitting its strongest level since April 6 last year at 71.65.

Against the dollar, the Russian currency firmed 0.5 percent to 63.76, a level last seen on March 22. A break through 63.63 would put the currency at levels last seen in August, reversing a collapse sparked by intensified fears about an increase in U.S. sanctions.

“We see chances for the USD/RUB to enter the 63.0-63.5 range in the short term,” said analysts at Rosbank, a subsidiary of Societe Generale.

“Major local tax duties are due on April 25, which should increase foreign currency selling from export-focused companies,” the analysts added. “Moreover, we expect the central bank to slightly soften its tone on Friday without changing the key rate, which should support a positive mood on the Russian market.”

Oil prices provided wider support for Russian assets. Brent crude oil, a global benchmark for Russia’s main export, was up 2.9 percent at $74.06 a barrel, its highest since November.

The board of the Bank of Russia will hold its next policy meeting on Friday. The market expects the bank to hold the key rate at 7.75 percent after also leaving it unchanged last month. “In our view, the CBR’s recent communication precludes a key rate change,” VTB Capital said in a note.