The Russian currency has been bolstered by a recent key rate hike and increased sales of foreign earnings by exporters
© Getty Images / Olga Chetvergova
The Russian ruble continued to strengthen against major currencies on Tuesday, surging to a five-month high, trading data from the Moscow Exchange (MOEX) showed.
The currency rose to 90.5 rubles to the US dollar as of 15:30 GMT, its highest exchange rate to the greenback since July 28. The ruble also gained against the euro, trading at around 98 rubles to the Eurozone currency, also the highest rate in five months.
The ruble has strengthened by almost 7% over the past month. Analysts have linked the rally to the recent key rate hike by the Russian central bank, which led to a drop in imports and, consequently, a decline in demand for foreign currency from importers.
A reduction in the budget deficit after a growth in oil revenues has also affected the exchange rate, along with increased sales of foreign currency earnings by Russian exporters. A mandatory measure ordering exporters to sell their foreign revenues and repatriate the proceeds was announced on October 12.
“This innovation was important: exporters were required to provide a plan for the purchase and sale of currency for the future, that is, it deprived them of the ability to play games – today they sold, tomorrow they bought back – this no longer works,” investment banker and professor at the HSE Research University Evgeny Kogan told Forbes Russia.
READ MORE: Russia’s oil and gas revenues hit 18-month high
The analyst expects a “stable ruble exchange rate with a slight strengthening” in the next five months, including surpassing the symbolic threshold of 90 rubles to the dollar. PSB chief analyst Evgeny Loktyukhov also forecasts that the ruble is likely to grow beyond this mark, but even sooner, ahead of tax payments by Russian exporters on November 28.
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