MOSCOW: Internal market movements and capital controls pushed the Russian ruble down to 62 per dollar on Monday, as stock indexes sustained losses following the latest Western sanctions. The rouble was 0.9 percent worse against the dollar at 61.46 at 0731 GMT, having stabilised in the relatively tight range of 60.0-62.5 in recent days following strong fluctuations in May.
The rouble fell 0.8 percent against the euro to 65.31, retreating from a near seven-year high of 57.10 reached on May 25. Capital controls imposed by Russia to protect its banking system soon after sending tens of thousands of troops into Ukraine on February 24 are driving the rouble on the Moscow Exchange.
The Russian currency is still significantly weaker in banks. VTB, Russia's second-largest bank, proposed selling cash dollars and euros for 84.00 and 89.00 roubles, respectively. Sanctions are still a hot topic. On Friday, EU countries approved their sixth set of sanctions against Russia for what it deems a "special military operation" in Ukraine, which includes a six- to eight-month import restriction on all Russian seaborne crude oil and petroleum products.
After the European Union added Russia to its enlarged sanctions list, the National Settlement Depository (NSD), which Moscow had expected to utilise to service its Eurobonds, will suspend transactions in euros. As the market awaited the central bank's rate decision on Friday, rates on 10-year OFZ treasury bonds fell to 9.01 percent in the local debt market. Yields on 2-year OFZs fell to 9.15 percent, moving in the opposite direction of their prices.
FOREX-Dollar maintains stability ahead of data, yuan gains on low volume
