(Reuters) – The Russian rouble was stronger in thin offshore trade on Tuesday as the local market was closed for a public holiday, with one analyst citing the bounce stemming from the fact that a Western ban on Russian oil imports was yet to materialise.
The rouble has lost around 40% against the dollar since the start of the year, with losses sharply accelerating after Russia invaded Ukraine on Feb. 24, a move that sparked sweeping sanctions from governments around the world.
The curbs on Russia, its lenders, companies and key individuals as well as counter measures from Moscow have made it increasingly difficult for investors to trade Russian assets.
At 1110 GMT, the rouble was bid at 131.8 against the greenback, according to Refinitiv data, almost 3% stronger than its closing level of 135.5 on Monday.
The bid-ask spread was very wide at 15 roubles, pointing to a highly illiquid market.
“The bounce (in the rouble) is because there’s some relief that something akin to an embargo on Russian oil may not be assured of or as likely as it seemed yesterday,” said Franziska Palmas, markets economist at Capital Economics.
“Trading conditions are so disrupted for Russian assets that it’s very hard to … know to what extent the prices reflect trading rather than expectations, or the fundamentals of those assets.”
A third round of talks between Russia and Ukraine on Monday made no major breakthrough.
A Ukrainian negotiator said although small progress on agreeing logistics for the evacuation of civilians had been made at the talks, things remained largely unchanged. A Russian negotiator said the talks had not been easy.
Currency trading is expected to resume on the Moscow Exchange on Wednesday, after being closed since Friday. Stock trading was restricted all last week by order of the central bank.
Russia will be excluded from all of JPMorgan’s fixed income indexes on March 31, the bank said on Monday, joining rival index providers that had earlier excluded Russian securities after Moscow’s invasion of Ukraine.
An investment firm that held some of Russian energy firm Gazprom’s $1.3 billion bond that matured on Monday said it had received full payment in U.S. dollars. Investors had been unsure if they would be paid after Russia placed restrictions on payments to foreigners holding its securities in response to the sanctions imposed by the West.
(Reporting by Reuters; Editing by Andrew Heavens and Alison Williams)
