Russian ruble hits 2016 high

The Russian ruble hit its highest against the dollar this year and Moscow-listed stocks rose on Monday as Brent crude held above $50 a barrel, supported by a planned production cut by oil exporters’ club OPEC.
At 1015 GMT, the ruble was 0.7 percent stronger against the dollar at 62.34 and had gained 0.9 percent to trade at 70.05 versus the euro. It earlier hit its highest against the US currency since October 2015 and its strongest against the euro since mid-July.
Brent crude, a global benchmark for Russia’s main export, was trading at around $50.7 a barrel, up 1.1 percent on the day.
But analysts were cautious on the chances for further gains in crude, given the stubbornness of an existing supply glut. If the oil rally loses steam, Russian assets could once again find themselves under pressure.
“We retain a certain degree of skepticism with regard to the prospects for a further strengthening of the Russian currency,” Rosbank analysts said in a note.
“Apart from the positive dynamics of oil prices, risks from budget problems and geopolitics rather speak in favor of a correction in the rouble,” they said.
Nordea analysts cautioned that if the ruble were to strengthen to near 60 to the US currency, Russian authorities could take steps to prevent it gaining further.
In July a Kremlin economic aide prompted the rouble to weaken by saying the rouble was starting to strengthen “too much.”
Russia’s dollar-denominated RTS share index rose 1.3 percent to 1,004 points, while the rouble-based MICEX was 0.4 percent higher at 1,985 points.
Shares in Bashneft and Rosneft jumped 5.7 percent and 1.6 percent, respectively, after the Russian government decided on Friday to reopen the privatization of Bashneft and to allow Rosneft to bid.

Source: Arab News