Ruble smashes four-year high against US dollar

The Russian currency strengthens ahead of upcoming tax payment

The Russian ruble reached its strongest position against the US dollar in over four years and reached a seven-year high against the euro on Friday. The ruble is being propelled by recently introduced capital controls, Russia’s new ruble-based gas payment scheme and looming tax payments for corporations pushing up demand for the currency domestically.

The exchange rate reached 57.67 rubles per dollar at 08:13 GMT, its firmest against the US currency since March 2018, according to data from the Moscow Exchange. The ruble also gained nearly 5% on the euro, with the exchange rate now below 60 rubles per euro, hitting a seven-year high.

The Russian currency has become the world’s best-performing currency this year despite its sharp drop in April sparked by unprecedented economic sanctions placed on Russia. However, it has since strengthened due to measures introduced by the Russian Central Bank and the government. The upcoming tax payment is pushing the ruble higher, as it traditionally requires extra conversion of foreign currency to rubles.

Russia’s stock indices have also been on the rise. The dollar-denominated Moscow Exchange index grew by 0.33%, up to 2,444.57 points, while the ruble-denominated RTS index edged higher by 0.72%, up to 1,254.69 points around 07:04 GMT, data from the trading floor shows.