Rouble hits two-year high against US dollar

THE Russian rouble has jumped to around a two-year high against both the dollar and the euro, retaining the support of hefty capital controls as the European Union proposes a new package of sanctions against Russia for events in Ukraine.

By 0721 GMT on Wednesday, the rouble was 0.7 percent stronger against the dollar at 70.49, after touching 68.6250 in early trade, its strongest since June 2020.

The ruble has been strong against the euro as well, touching 72.00 in morning trading in Moscow, its highest point since February 2020.

This comes as the EU proposed a sixth package of sanctions against Moscow, which includes the gradual phasingout of Russian oil imports.

The euro is currently hovering around a five-year low against the dollar with soaring inflation and energy uncertainty caused by the Ukraine-related sanctions against Russia.

On Friday the Russian central bank cut its key interest rate to 14 percent in the latest attempt to boost lending in the sanction-hit economy.

In another sign that the state wants to stimulate economic growth, President Vladimir Putin on Monday proposed reducing the subsidised mortgage rate to 9 percent from 12 percent.

At a televised meeting on the economy, Putin praised the central bank’s and government’s “timely” decisions in helping stabilise the economic situation.

The central bank on Monday said it was shortening the time frame it uses to calculate the official exchange rate by one hour, a move that Sberbank CIB analysts said suggested the regulator was noting an improvement in the liquidity situation on the foreign exchange market.