Ruble Rises above 60 to U.S. Dollar

MOSCOW--The Russian ruble rose beyond the psychologically important mark of 60 per dollar on Friday, for the first time since early 2015, buoyed by investors' interest in buying into Russian assets ahead of a possible rate cut by the central bank.

After hitting all-time lows of around 80 to the dollar in December, the ruble has been gradually recovering since, thanks to the stabilization of the oil market.

The ruble firmed to 59.28 against the dollar on the Moscow exchange, a level last seen on Jan. 5. By 1535 GMT the Russian currency had given up some gains, sliding to 60.13, but still having gained 1.1% on the day.

Dmitry Tulin, who joined the central bank's board as first deputy chairman in January, taking over as monetary policy chief, supported the ruble by hinting at the normalization of the central bank's hitherto hawkish monetary policy. In his first public interview on Thursday, Mr. Tulin said that the bank's key rate should not necessarily be above inflation.

Mr. Tulin's interview raised the probability that the central bank will cut rates, which gave impetus to buying into Russian assets before yields go lower following the rate cut, said Mikhail Rumyantsev, head of trading at Rosbank, a Russian arm of Société Générale.

The situation in Ukraine has also served to strengthen the ruble, as the degree of violence in the eastern part of Russia's neighbor has gradually ebbed.

"A cease-fire in Ukraine is somehow in place. The market has been discounting negative news since the Minsk agreements," Mr. Rumyantsev said, referring to a summit in Belarus capital on Feb. 11-12, where the leaders of Ukraine, Russia, France, and Germany agreed to a package of measures aimed at stopping the conflict in Ukraine.

A trader at a major Russian bank in Moscow noted that the ruble was recovering on a very thin market, pricing in recent political developments and shrugging off a U.S. decision to prolong sanctions against Russia.

The market is waiting for the central bank rate decision on March 13 and month-end tax payments, which usually prompt exporters to convert foreign currency to meet local liabilities. The latter may help the ruble to firm to between 52 and 57 to the dollar in the medium term, Mr. Rumyantsev said.

Write to Andrey Ostroukh at [e-mail]

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