High oil prices and the central bank’s tough monetary policy have paid off for Russia, as the ruble is on track to post its largest monthly gain for the year against the US dollar.
So far in October, the ruble has risen over 3% versus the US currency. The pair have remained on a downward trend, with investors opting to use gains to sell the greenback against the Russian currency, according to analysts at VTB Capital, as quoted by Reuters.
On Friday, the ruble stepped back from the 15-month high of 69.21 it reached against the dollar on Tuesday, and was trading at 70.57, marking a decline of 0.5%. Versus the euro, the ruble slipped 0.4% to a one-week low of 82.34.
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The decline comes due to the end of monthly tax payments, which commonly involve converting dollar and euro funds among export-focused businesses that have to meet local liabilities.
At the same time, the Russian currency is being bolstered by high oil prices, with Brent crude – a global benchmark for Russia’s main export – trading up 0.1% at $84.39 per barrel.
Moreover, the Russian central bank has raised the key rate six times this year, and may report another hike as soon as next month, boosting the investment appeal of Russian assets and providing extra support for the national currency.
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