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Russian ruble weakens, exporters pay month-end taxes
The Russian ruble weakened on Wednesday, set to lose the support of today’s month-end tax payments and with investors keenly observing the consequences of an aborted mutiny by heavily armed mercenaries over the weekend.
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At 0711 GMT, the ruble was 0.3 percent weaker against the dollar at 85.26. On Monday it had slumped to its weakest point since late March 2022.
The ruble lost 0.2 percent to trade at 93.41 versus the euro and was 0.1 percent firmer against the yuan at 11.78.
Capital controls have helped insulate the rouble against geopolitics to a certain extent in the last 16 months since Russia invaded Ukraine, but Yevgeny Prigozhin’s march on Moscow reverberated through markets and left questions about President Vladimir Putin’s grip on power.
Market players are likely to remain cautious, analysts have said, while today’s passing of a month-end tax period that typically see exporters convert foreign currency revenues to meet local liabilities, will see the rouble lose support.
“Last weekend’s events, we are sure, were unexpected for many investors and rekindled the question of whether the current risk premium for investing in Russian assets is acceptable,”said Dmitry Polevoy, head of investment at Locko-Invest.
Polevoy said his forecast of the rouble strengthening to around 74-76 against the dollar before ending the year near 80, now looked less likely.
Brent crude oil, a global benchmark for Russia’s main export, was up 0.1 percent at $72.36 a barrel.
Russian stock indexes were mixed.
The dollar-denominated RTS index was unchanged at 1,028.3 points. The rouble-based MOEX Russian index was 0.3 percent higher at 2,785.7 points.
Russia’s finance ministry plans to hold one OFZ treasury bond auction on Wednesday.
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