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Rouble recovery loses steam, stocks falls after new U.S. sanctions -Breaking

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© Reuters. FILE PHOTO – A sign with the logo can be seen outside of the Moscow Exchange office in Moscow, Russia. It was displayed on March 24, 2022. REUTERS/Maxim Shemetov

(Reuters] – On Friday the Russian rouble soared to the highest point since July 2020, against the euro. However, gains were later trimmed and stock indexes sank due to the decline in shares of oil companies.

The rouble fell 0.6% against the dollar at 0736 GMT. This is a significant decline from the level it reached on Thursday, February 11, 74.262525.

The rouble rose to 80.2225 against the euro before falling 0.5% to 81.82.

The rouble moved jitterily and the trading volume on the Moscow Exchange was below average over the last weeks. However, the rouble is back to the levels it was before Russia launched its “special military operations” in Ukraine on February 24.

Recent changes in the currency have helped to stabilize it. Companies that are export-oriented must convert dollar and euro revenue. However, capital controls imposed by Russia after March’s record tumble of the ruble has limited demand for forex.

Current restrictions on the purchase of cash dollars, euros and euro are limiting foreign currency demand.

Promsvyazbank analyst said that the ruble will continue to strengthen without central bank action and could reach the 70-75 range against the dollar in the course of the day.

Otkritie bank stated in a note that despite the recent rouble strengthening, there is still some possibility of a recovery in FX demand.

Anton Siluanov, Finance Minister, said Wednesday that his ministry and the central bank are working together to improve the predictability of the rouble’s exchange rate.

The dollar-denominated RTS Index fell 0.5% to 1,087.4 Points on the stock exchange. At 2,631.8 points, the MOEX Russian index, which is based on roubles was 0.1% less.

Bashneft shares lost 3.2% to the market, while Lukoil shares were up 0.5%.

After the U.S. Congress passed two measures to eliminate Russia’s “most favored nation” status trade status, and one to ban imports of oil, oil stocks fell.

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