Russian rouble gains vs dollar after Fed shifts outlook

MOSCOW: The Russian rouble strengthened against the globally weaker dollar on Thursday after the U.S. Federal Reserve sounded close to calling time on interest rate rises, and fought off weaker oil prices to gain against the euro and yuan.

By 10:57 GMT, the rouble was 1.3% stronger against the dollar at 76.09, heading towards a one-week high. In a widely expected move, the Fed raised interest rates by 25 basis points but recast its outlook to a more cautious stance as a result of recent turmoil in financial markets spurred by the collapse of two U.S. banks.

The rouble gained 0.5% to trade at 82.81 versus the euro , recovering from a more than 11-month low of 83.8850 touched early in the session. It firmed 0.5% against the yuan to 11.13. The rouble should start gaining support from month-end tax payments, when Russian exporters' demand for roubles tends to increase as they convert foreign currency revenue to pay local liabilities.

"We continue to expect the return of the dollar-rouble pair to the 74-76 range," said Egor Zhilnikov of Promsvyazbank. "We note that exporters active on the market ahead of tax payments will lend additional support to the rouble." Brent crude oil, a global benchmark for Russia's main export, was down 0.6% at $76.2 a barrel.

Brent's move lower after the Fed announcement indicated there were recession risks globally, said Sinara Investment Bank. "However, the Russian (equity) market remains to a large degree isolated from 'overseas risks' and may consolidate until new triggers emerge," Sinara said.

Russian stock indexes were mixed. The rouble-based MOEX Russian index was 0.3% lower at 2,387.9 points, though not far from Tuesday's six-month high of 2,431.23 points, sparked by Sberbank's recommendation of a record dividend payout last week and consolidated by Chinese President Xi Jinping's Moscow visit.

The dollar-denominated RTS index was up 0.9% to 988.7 points.