September 19, 2018 / 8:25 AM / 3 months ago

Rouble reaches one-month high vs dollar, geopolitics in focus

MOSCOW, Sept 19 (Reuters) - The Russian rouble rose to a one-month high against the U.S. dollar on Wednesday, supported by month-end taxes, higher oil prices and the central bank’s decision to halt its daily buying of foreign currency by the end of the year.

The rouble was 0.5 percent stronger at 67.02 versus the dollar as of 0735 GMT, having briefly hit 66.94, a level last seen on Aug. 20.

Demand for foreign currency has waned, which today gives the rouble chances to test levels of 66.50 to 67.00 versus the dollar, taking into account support from taxes, said Dmitry Polevoy, chief economist at Russian Direct Investment Fund.

Russian export-focused companies usually bolster the rouble by converting their foreign-currency revenues to meet month-end taxes at home.

The rouble has also priced in the central bank’s decision to suspend its daily buying of foreign exchange for state reserves until the end of this year.

In the absence of the central bank’s daily buying, the rouble has finally felt support from rising oil prices. Brent crude oil, a global benchmark for Russia’s main export, was up 0.1 percent at $79.13 a barrel.

Versus the euro, the rouble gained 0.2 percent to 78.42 , its strongest since Sept. 3.

Geopolitical tensions are still putting pressure on the Russian market, especially after a Russian plane was downed near Syria’s coast earlier this week.

President Vladimir Putin, however, said the incident was the result of a chain of chance circumstances, in comments that appeared to somewhat defuse the situation.

The dollar-denominated RTS index was up 0.6 percent to 1,129.6 points, while the rouble-based MOEX Russian index was 0.1 percent higher at 2,404.2 points.

For Russian equities guide see

For Russian treasury bonds see (Reporting by Andrey Ostroukh, editing by larry King)

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