Russian Ruble Edges Higher to Reach Pre-War Level

The ruble again edges to make it for all of its losses since the Russia’s invasion in Ukraine.

The currency has strengthened in 13 of the past 14 trading session in Moscow paring most of the 33% decline that it saw after the war broke out. On Tuesday, the ruble strengthened more than 4% on the day to around 86 per USD, underscoring to a level closer to pre-war level.

“The ruble’s rebound has really been the result of policies by the Central Bank of Russia to enforce buying and limit selling,” said Natalie Rivett, senior emerging market analyst at Informa Global Markets Ltd, as reported by Bloomberg.

“A ceasefire between Russia and Ukraine would likely help to support the ruble, but it’s difficult to envision any sustainable appreciation.”

Yet, the dollar-ruble pairs is roughly 6% away from the key mark of 81.16 – the level it had close don February 23 which was a day before President Putin ordered his army to invade Ukraine.

Guillaume Tresca, a senior emerging-market strategist at Generali Insurance Asset Management, echoed lingering risk in the currency, which isn’t in a typical, functioning market.

Capital controls by the central bank as well as Russia moving to sell natural-gas in its currency has provided some strength to the currency.

“The strengthening has to be taken with a pinch of salt,” Tresca said. “The RUB strengthening is fragile, more driven by technical factors than a real economic improvement.”