According to Reuters, the Russian ruble strengthened on April 25 at 77 rubles/ euro. This is the highest rate in nearly 2 years, supported by tax payments that companies have to make this week and as the market awaits the exchange rate decision of the Russian Central Bank on April 29.
At 2:53 p.m. GMT (21:53 Vietnam time) on April 25, the ruble increased by 3.6% to trade at 77.25 rubles/ euro - the strongest exchange rate since June 2020.
The ruble also rose more than 3% against the US dollar, trading at 73.17 rubles/USD, hovered around the same level before February 24 when Russia began its military campaign in Ukraine. On February 24, the ruble was traded at 81 rubles/USD.
However, trading activities have decreased compared to the level seen before February 24. ruble volatility has been limited by capital control measures imposed by the Central Bank because the bank has lost the ability to support rubles through foreign exchange intervention measures after Western sanctions froze nearly half of the country's reserves.
The ruble is supported by a record 3 trillion rubles ($40.25 billion) in taxes payable by companies this month, according to analysts surveyed by Reuters. To make payments, some companies focusing on exports need to sell foreign currency.
Veles Capital said the tax increase could push the ruble higher, but the expected interest rate cut by the Russian Central Bank on April 29 could reduce optimism.
The market is waiting for the Central Bank's exchange rate decision, after two emergency interest rate adjustments last month - increasing to 20% at the end of February, followed by a decrease to 17% on April 8.
A Reuters poll shows that the bank will cut 200 basis points to 15%.
In another sign that the state wants to stimulate economic growth, President Vladimir Putin on April 25 proposed reducing the subsidized mortgage rate from 12% to 9%.
At an economic meeting, President Putin praised the " timely" decisions of the Central Bank and the government in helping to stabilize the economic situation.
On April 25, the Central Bank said it had shortened the time frame used to calculate the official exchange rate to one hour. Sberbank CIB analysts said that this move shows that the management agency is recording an improvement in liquidity in the foreign exchange market.
Meanwhile, Russia is still having a headache with divestment. The share of foreign investors holding Russian OFZ Treasury bonds fell to 17.7% in March, their lowest level since late 2012. Meanwhile, Russia's stock indexes have mixed movements.
The USD-based RTS (.IRTS) rose 2% to 946.5 points. The Russian MOEX index in rubles (.IMOEX) fell 1.5% to 2,199.5 points, its lowest level since February 24.
In general, according to analysts, in the context of the Ukrainian war entering its third month, despite the most severe economic sanctions ever applied to a country, the Russian ruble is getting stronger.
Obviously, despite a huge package of sanctions against the Russian government and the tycoon world, as well as the withdrawal of foreign enterprises, these moves are all but ineffective if foreign citizens continue to consume Russian oil and gas, which is supported by rubles.
