Rouble's Strength Amid High Interest and Export Taxes

The Russian rouble maintained its stability near 80 to the dollar on Monday, driven by high interest rates, subdued demand for foreign currency, and impending tax payments from major exporters.

As of 0828 GMT, the rouble stood at 79.75 per U.S. dollar, a slight decrease of 0.3%, according to data from LSEG. The currency recently achieved a near two-year high of 79.32 against the dollar.

Analysts attribute the rouble's over 40% increase against the dollar this year to decreased geopolitical tensions, primarily with the U.S. under President Trump, and the central bank's stringent monetary policies. These factors have lowered foreign currency demand.

The government extended obligations for major exporters to sell portions of their foreign currency earnings until April 2026, further supporting the rouble.

Maxim Timoshenko of Russian Standard Bank noted that these restrictions, the 21% key interest rate, and upcoming tax payments benefit the rouble.

Exporters typically convert foreign earnings into roubles for month-end tax payments.

Timoshenko stated that the national currency's trajectory relies on recovering import demand dynamics, geopolitical considerations, and sanctions.

The rouble faced a 0.4% dip against the Chinese yuan at 11.07 on the Moscow Stock Exchange, with the yuan being the most-traded foreign currency in Russia.

Brent crude oil, a crucial export for Russia, increased by 0.4% to $65.07 per barrel.

(With inputs from agencies.)