At a high of two years the ruble strengthens

At about two years high, both against the dollar and the euro, the Russian ruble is strengthening today, backed by tight capital controls as the European Union proposes a new package of sanctions against Russia for its invasion of Ukraine.

In particular, the ruble strengthened by 0.7% against the dollar with its exchange rate at 70.49 rubles per dollar, while earlier today the pair had reached 68.6250, the highest level of the ruble against the US dollar. currency from June 2020.

Correspondingly, the Russian currency strengthened by 1.2% against the euro and traded at 73.84 rubles / euro, while the exchange rate had fallen earlier to a high since February 2020 at 72.00 rubles / euro.

The movements in the Russian markets are influenced by the fact that the ruble is supported by capital controls, while the shares are traded with a short selling ban and in order for foreign investors to sell shares of Russian companies, a special license is required.

However, according to Reuters, market participants are wondering whether the current exchange rate can be maintained in the light of restrictions, as the ruble plunged to a record low in early March when the West imposed unprecedented severe sanctions on Moscow and its financial system. .

On Friday, Russia’s last-minute dollar-denominated bonds to avoid bankruptcy, after declaring that it would only pay in rubles, helped ease some of the pressure on its assets.

Sberbank’s share rose 0.3% after announcing new sanctions imposed by the European Commission, which proposed the expulsion of the largest Russian bank and two more from the international trading system SWIFT, dealing another blow to the Russian financial system.

According to Reuters, however, analysts at Veles Capital estimate that the sanctions on Russian banks were unpleasant for the industry, but not critical.