Rouble Rallies Ahead of Month-End Taxes Amid Geopolitical Tensions

The rouble strengthened against the dollar on Tuesday, bolstered by the nearing month-end tax payments that see exporters selling their foreign currency earnings to meet local liabilities. At 0900 GMT, data from LSEG revealed that the rouble had risen by 0.55% to 80.25 against the dollar.

Despite this gain, the rouble saw a slight decline of 0.1% to 11.19 against China's yuan, the most-traded foreign currency in the Russian market. This followed a month-low on Monday, when the rouble fell to 11.29 against the yuan. Meanwhile, Brent crude oil experienced a dip of 1.02%, trading at $68.07 per barrel, as concerns over potential disruptions to Russian fuel supplies loomed.

The backdrop of geopolitical uncertainty and the risk of reduced export revenues, exacerbated by Ukrainian assaults on Russian energy infrastructure, continue to challenge the rouble's stability. However, upcoming tax payments on August 28, including a significant mineral extraction tax for July, are expected to provide some support. Reuters estimates this tax to amount to approximately 575 billion roubles, up from 543 billion roubles in June.

(With inputs from agencies.)