Rouble falls as Russia relaxes capital controls; Rosbank shares jump 40%

A view shows Russian rouble coins in this illustration picture taken March 25, 2021. REUTERS/Maxim Shemetov/Illustration/File Photo

April 11 (Reuters) – The rouble weakened sharply on Monday, reversing some of the previous week’s gains, after Russia relaxed temporary capital control measures aimed at limiting a drop in the currency.

Shares in Rosbank (ROSB.MM), a Russian subsidiary of French bank Societe Generale, jumped 40% after SocGen said it would quit Russia and take a 3 billion euros ($3.3 billion) income hit from selling Rosbank to Interros Capital, a firm linked to Russian oligarch Vladimir Potanin. read more

By 1500 GMT, the rouble had lost more than 4% of its value in jittery trade, sliding to 79.45 to the dollar , and was down 4.5% to 86.45 against the euro .

During the trading session on Moscow Exchange, the rouble fell to 82.0950 against the dollar, from the 71 roubles hit on Friday which was its strongest since Nov. 11. read more

Late on Friday the central bank said it would scrap a 12% commission for buying foreign currency through brokerages from April 11 and lift a temporary ban on selling foreign exchange cash to individuals from April 18. read more

“The central bank gave markets a unequivocal signal that a further rouble strengthening was undesirable,” said Vladimir Evstifeev, an analyst at Zenit Bank.

The decision to scrap the 12% commission on FX operations means speculators will be able to trade again, Alor Brokerage said, adding market players were tending to lock in even small profits.

The rouble retains support from the obligatory conversion of 80% of FX revenues by export-focused companies as well as from high interest rates, even though the central bank unexpectedly cut its key rate from 20% to 17% last week. read more

ITI Capital analysts said Russia receives about $1.4 billion a day in export revenues and the rouble could firm further, given Russian capital controls and shrinking imports.

The central bank’s cut supported Russian OFZ government bonds. The finance ministry said at the weekend that it wouldn’t borrow on local or foreign debt markets this year.

Finance Minister Anton Siluanov also said Russia would take legal action if the West tried to force it to default on its sovereign debt. read more

Yields on 10-year OFZs, which move inversely with their prices, fell to 10.45% on Monday . That was their lowest since Feb. 21, three days before Russia started what it calls “a special military operation” in Ukraine, triggering unprecedented Western sanctions against Russia.

On the stock market, the dollar-denominated RTS index (.IRTS) fell 5.8% to 1,017.4 points and the rouble-based MOEX Russian index (.IMOEX) shed 1% to 2,566.6 points, with losses limited by the rouble’s slide.

Reporting by Reuters
Editing by David Goodman and Mark Potter

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