March 23, 2017 (Reuters) – On Wednesday, Rouble Russian closed at its strongest level against the dollar since February next to President Vladimir Putin declared that Russia would begin selling gas to “unfriendly countries” in roubles. The Rouble fell below 100 dollars but is still lower than 22% this year, as Russia faced severe sanctions worldwide due to its invasion of Ukraine last month. European gas prices rose after Putin’s shocking announcement.
This was due to concerns that the move would worsen the region’s energy crisis. “It appears to be an attempt by the Russian authorities, to apply pressure, Forcing foreign Western countries purchasers of Russian gas to use rubles, with the additional benefit of supporting the currency’s value,” stated Liam Peach (Emerging Europe economist at Capital Economics) in a client note. After touching 94.9875 in Moscow, the Rouble saw a 6% increase to close at 97.7375 for $1. The EBS platform showed it closing at 96.5, an 8.8% increase.
Both closing prices were at their highest since February. The Rouble rose 6.6% in Moscow against the euro to 108.01 After a nearly month-long hiatus in trading, the Bank of Russia announced that some stock market trading would resume this week. Thirty-three securities were included in the benchmark IMOEX Index (.IMOEX). Short selling will be prohibited, and only limited trading will occur on the Moscow Exchange. read more <https://www.reuters.com/business/finance/limited-russian-stock-market-trading-resume-march-24-central-bank-says-2022-03-23/> The central bank has not yet disclosed the amount of its intervention on the OFZ markets that stabilized prices and added liquidity to the financial sector. After hitting a record high Monday of 19.74%, the benchmark 10-year OFZ bond yields closed at 13.85%. At the end of 2021, the benchmark yielded 8.42%. COUPON PAYMENT Russia seemed to have avoided defaulting foreign debts by making a dollar coupon payment on a foreign bond due in 2029.
The bondholder claimed that the payment was received. Due to sanctions, Russian corporate Eurobond holders face delays in receiving payments through international agents. On Wednesday, the central bank sold 0.8 trillion rubles ($7.7billion) in a one-day repo auction. This was lower than the previous days. Veles Capital brokerage stated that “demand at overnight repo auctions has fallen fast,” explaining that although banks’ liquidity levels are at their lowest level since June 2013, lenders are still repaying repo debts to the central bank.