Russian rouble, lifted by govt bonds and oil, hits two-week high – Reuters Africa

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MOSCOW, March 13 (Reuters) – The Russian rouble briefly hit a two-week high on Wednesday, helped by foreign interest in the country’s treasury bonds and higher oil prices.

At 0720 GMT, the rouble was stable against the dollar at 65.59 after touching its strongest level since Feb. 27 of 65.53. It traded at 74.01 versus the euro .

The market was awaiting two Russian finance ministry auctions of OFZ government bonds, demand for which is a gauge of market sentiment towards Russian assets.

The central bank said earlier this week that foreign investors had increased their holdings of OFZ bonds in February.

Andrei Kochetkov, an analyst with Otkritie Brokerage, said the strengthening of the rouble in recent days was partly linked to growing demand for OFZ bonds.

“The rouble noticeably strengthened during the day (Tuesday),” Kochetkov said in a note. “In many ways, this speaks to investors’ preparation for the OFZ auctions.”

The rouble has outperformed most of other emerging-market currencies so far this year, but analysts say its potential for further growth is stymied by external conditions and the Russian central bank.

“The (rouble’s) potential for strengthening, in my view, is seriously limited,” said Sergei Gaivoronsky, an analyst at BCS brokerage. “One of the reasons for reversal (in the rouble’s rate) could be an increase in geopolitical tensions.”

A trader from a large Western bank in Moscow said that the rouble would be stronger without the central bank’s purchases of foreign currency for the state reserves.

The central bank increased daily FX buying on behalf of the finance ministry in March following a recovery in prices for oil, Russia’s key exports.

On Wednesday, Brent crude oil, a global benchmark for Russia’s main export, was up 0.4 percent at $66.95 a barrel, supported by ongoing supply cuts by OPEC and U.S. sanctions against Venezuela and Iran.

Russian stock indexes were down. The dollar-denominated RTS index shed 0.2 percent to 1,181.33 points. The rouble-based MOEX Russian index was 0.4 percent lower at 2,459.92 points.

For Russian equities guide see

For Russian treasury bonds see

Reporting by Gabrielle Tétrault-Farber, additional reporting
by Vladimir Abramov; editing by Andrey Ostroukh, Larry King

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