March 31 – The Russian ruble rose for a ninth straight session in Moscow, ending at 83 per dollar on Thursday, and shares jumped higher as some restrictions on short selling were lifted, with the market preparing for the impact of Moscow’s Demand focused its gas exports are paid in rubles.
The ruble closed 1.6% higher against the dollar at 83.20, its strongest close since February 25, and gained 1.8% against the euro to close at 92.50.
The currency has lost almost 40% of its value since the 2021 close, when global restrictions and sanctions kicked in late last month in retaliation for Moscow’s invasion of Ukraine.
The dynamics driving the ruble are to some extent artificial. The currency, which was floating until the end of February, is now being controlled by capital controls, a ban on buying dollars and euros in cash and other administrative measures.
In Moscow trading, the ruble has risen in 15 of the last 16 sessions.
The Russian currency extends gains from last week after President Vladimir Putin demanded that natural gas exported to Europe be paid for in rubles, a move that prompted European countries to act. Continue reading
Putin is urging foreign buyers to pay for Russian gas in rubles from Friday or cut their supplies. Continue reading
“There is little chance that Europe will pay directly in rubles,” said Christian Lawrence, senior market strategist at Rabobank.
“Putin has said very clearly that he needs rubles for this gas. So when it happens, I think it goes through a third party. But we’ll have to wait and see how that develops.”
On Wednesday, two sources told Reuters that Russia plans to keep the contract currency for gas exports to Europe unchanged, but would seek the final payment in rubles as one of the options for switching the currency of gas trading, which may allay concerns from some traders. Continue reading
Russia’s Gazprombank (GAZP.MM) on Thursday said it would create conditions to enable convenient payments for Russian gas in rubles, Tass news agency said. Continue reading
On the interbank market, bids for the ruble reached 75 against the dollar in the previous session and fluctuated around 79 on Thursday. The ruble stood at 81 against the dollar on the electronic platform EBS, below the level last seen before the invasion was recorded.
SHARES GO HIGHER
Russian stock indices were higher. The central bank on Thursday lifted a ban on some short selling, but restricted it to shares in 83 companies and only banks and brokers.
On Thursday, the bank told Reuters that the March 1 ban on buying and selling securities between Russians and foreigners from “unfriendly” countries is indefinite.
The Moscow Stock Exchange said trading in foreign securities would resume once transfers between Russia’s National Settlement Depository (NSD) and international clearing houses Euroclear and Clearstream, which are currently blocked, are cleared.
“Foreign securities purchased by investors on the stock exchange will be held in Russian jurisdiction,” the Moscow Stock Exchange said.
The dollar-denominated RTS index (.IRTS) rose 7.6% to 1,021.28 points, the highest close since Feb. 23, the day before Russia sent tens of thousands of troops to Ukraine.
The ruble-based MOEX Russian Index (.IMOEX) rose 7.6% to 2,703.51 points.
Shares in energy giant Gazprom (GAZP.MM) rose 12.3%. Shares in sanctioned lender VTB (VTBR.MM) rose 15.4%.
SPB Exchange, Russia’s second-largest stock exchange, said it plans to resume trading in several securities of Russian companies with foreign primary listings, but not before April 7.
Russia has issued 50.2 billion rubles ($613 million) in coupons for seven OFZ treasury bond issues, data on its website showed.
Yields on Russia’s benchmark 10-year OFZ government bond, which move inversely with prices, fell to 11.1%, their lowest level since February 22. read more
Reuters reporting; Editing by Clarence Fernandez, Jason Neely and Sandra Maler