The Russian ruble strengthened on Tuesday to levels seen since March 2018 against the dollar, strengthened by companies that focus on exports and sell foreign currency to pay taxes, according to Reuters.
The ruble has strengthened about 30 percent against the dollar this year, despite the economic crisis in Russia, making it the best-performing currency in the world.
The ruble is being strengthened by capital controls imposed in late February to shield Russia’s financial sector following Moscow’s decision to invade Ukraine, prompting Western sanctions.
The ruble rose as much as 0.7% against the dollar to 57.44 while previously “reaching” 56.61 on the Moscow Stock Exchange for the first time in more than four years.
Against the euro, the ruble strengthened by 0.9% to 59.57, moving close to a seven-year high.
The strength of the currency has raised concerns about the negative impact on Russia’s budget revenues from exports. On Monday, Russia cut its share of foreign currency earnings, which exporters must convert into rubles, to 50% from 80%.
Despite the slight easing of capital controls, the ruble could stabilize at 55 against the dollar in the near future, said Dmitry Polevoy, head of investment at LockoInvest.
The ruble could return to 60-65 against the dollar in June, Sinara Investment Bank said.