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Rouble soars after cenbank holds rates at 7.5%
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Cenbank keeps future rate hikes on the table
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Tax payment deadline also providing rouble support
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Rouble hits 3-week high near 79 vs dollar
(Updates prices, adds Locko-Invest, Zabotkin comments, bullets)
By Alexander Marrow
April 28 (Reuters) - The Russian rouble leapt to a
three-week high against the dollar, euro and yuan on Friday,
strengthening sharply after the Bank of Russia held interest
rates at 7.5% and exporting firms made month-end tax payments.
The bank, whose decision was in line with analysts' forecasts, kept the need for
rate hikes on the table over lingering inflationary risks and flagged demand-side factors that could threaten its goal of returning inflation to target.
Higher rates support the rouble by making investment into rouble-denominated assets more attractive. By 1513 GMT, the rouble was 1.3% stronger at 80.28 to the dollar , pulling back from gains of around 3% earlier in the session and hitting its strongest point since April 4 of 79.0175. It had gained 1.1% to trade at 88.77 to the euro and firmed 1.1% against the yuan to 11.58 roubles , also hitting three-week highs. "According to the results of the meeting, it has become clear that economic activity in the country is increasing, and also that in future the regulator is planning to increase the key rate," said Promsvyazbank analysts in a note.
If the rouble closes at 80 to the dollar, the prospect for further strengthening opens up, they added.
Others disputed the central bank's impact.
"For the rouble the decision is neutral," Dmitry Polevoy, head of investment at Locko-Invest said.
"The direct impact of the rate on the exchange rate is
now minimal and today's growth is likely an exporter 'ambush'
(Friday is the tax payment deadline) and a correction of
speculative positions before the long holidays," he said.
Month-end tax payments, due on Friday, usually lead exporters to convert foreign currency revenue to meet local liabilities, supporting the rouble.
The Bank of Russia's Deputy Governor Alexei Zabotkin said Russia's weakening current account surplus, as imports have recovered, is to blame for the rouble's weakening in recent months.
The bank has played down the impact of Western asset sales on the rouble rate, but on Friday
backed plans to introduce limits on how foreign companies leaving the Russian market are able to cash out.
Brent crude oil , a global benchmark for Russia's main export, was up 1.3% at $79.35 a barrel.
Russian stock indexes were mixed. The dollar-denominated RTS index was up 0.8% to 1,032.3 points. The rouble-based MOEX Russian index was 0.6% lower at 2,631.1 points, earlier hitting its highest mark in a little over a year. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Russian central bank keeps future hikes on table as it holds rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Alexander Marrow; Editing by Toby Chopra and Jonathan Oatis)
