Russian Rouble Starts Recovering As Tax Payments Loom

Russian Rouble Starts Recovering As Tax Payments Loom

Russian Rouble Starts Recovering As Tax Payments Loom

The Russian rouble gained against the dollar on Thursday, boosted by capital controls and impending tax payments, which normally necessitate further currency conversion to roubles to meet local obligations.

Despite a full-fledged economic catastrophe, the rouble has become the greatest currency this year, aided by measures implemented by Russia in late February to protect its financial sector after sending tens of thousands of fighters into Ukraine.

The rouble increased by 0.8%. The demand for dollars and euros is constrained by capital controls and a decline in imports due to disturbed logistics in the fallout of sanctions, while the rouble is directed by the requirement for export-focused enterprises to convert 80 percent of their income.

Yields on 10-year treasury securities fell 0.02 percent on the bond market. Yields moving in the opposite direction of bond prices are projected to fall further this year as the central bank prepares to drop its benchmark rate to support the economy and inflation slows as the rouble strengthens.

At its next board meeting in June, the central bank is expected to decrease its main rate by 100-200 basis points from 14 percent.

The dollar dipped slightly in early European trade on Thursday, giving up some of the previous session’s significant gains, but the safe haven remains popular with investors as risk sentiment remains weak.

Despite the fact that safe-haven assets have cooled following a recent gain, sentiment remains fragile due to growing concerns that the Federal Reserve and other global central banks would stifle development.

Following increases in domestic cooking oil supply, Indonesia will lift its restriction on palm oil exports on Monday.

The prohibition on exports of the extensively used vegetable oil was imposed by Indonesia to manage domestic prices, but farmers have protested that there is no demand for their palm fruits, leading to calls for it to be lifted.

The prohibition has shaken global vegetable oil markets, which were already reeling from the loss of a large portion of sunflower oil supplies due to the Ukraine conflict.

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