Rouble leaps after Russia says some troops are returning to bases By Reuters

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© Reuters. FILE PHOTO: Service members participate in navy workout routines held by the armed forces of Russia and Belarus on the Gozhsky coaching floor within the Grodno area, Belarus, February 12, 2022. Leonid Scheglov/BelTA/Handout through REUTERS

MOSCOW (Reuters) – The rouble rose on Tuesday, extending good points from the earlier session, after Russia mentioned some troops close to Ukraine had been returning to their bases after navy workout routines, following a Russian asset sell-off final week on renewed invasion fears.

The rouble soared after Russia’s defence ministry was quoted as saying that some troops in Russia’s navy districts adjoining to Ukraine had been returning to bases after finishing drills, a transfer that would de-escalate tensions between Moscow and the West.

By 0831 GMT, the rouble was 1.5% stronger in opposition to the greenback at 75.62, nonetheless a way off ranges previous 75 it hit earlier than its sharpest drop in almost two years on Friday.

The rouble strengthened 1.3% in opposition to the euro to 85.62.

On Monday, the forex gained after Russian International Minister Sergei Lavrov instructed to President Vladimir Putin that Moscow ought to proceed alongside the diplomatic path in its efforts to extract safety ensures from the West.

The forex’s response to these phrases confirmed {that a} single phrase could be adequate to maneuver the rouble strongly in both path, mentioned Dmitry Polevoy, head of funding at Locko Make investments.

“We nonetheless consider the rouble is prone to rise from these ranges,” he mentioned. “In response to our tough estimate, the rouble has lagged different EM currencies by 5-7% because the begin of the yr.”

Russia’s troop buildup has spooked Western powers, a lot of whom have warned Russia may invade Ukraine imminently, one thing Moscow has repeatedly denied planning.

“The shuttle diplomacy continues – so long as the West stays vocal on the difficulty, the market will proceed to observe headlines, with the binary end result (an additional deterioration vs conciliation) suggesting important up/draw back,” BCS World Markets mentioned.

The rouble additionally acquired help from export-focused firms promoting overseas forex earlier this week, VTB Capital mentioned.

, a world benchmark for Russia’s principal export, was down 1.5% at $95.00 a barrel, however not removed from a greater than seven-year excessive.

Russian inventory indexes had been up, additionally recovering after a sell-off within the earlier two classes.

The dollar-denominated RTS index rose 4.7% to 1,492.7. The rouble-based MOEX Russian index was up 2.8% at 3,579.9.

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